Classic current accounts are an excellent solution for managing money inflows and outflows, but fail to meet the needs of those who want to obtain a return on the sums deposited or make low-risk investments. In these cases, the ideal is to open a current account with deposit function.
An account with term deposits allows you to receive interest calculated on the sums in the account. The interest rate is higher than that offered by a normal current account and varies depending on whether or not you decide to keep the money in the account for a certain period of time.
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How term deposits work
When it comes to term deposits is referred to deposit accounts, a particular form of current account that allows you to deposit liquidity and obtain a certain return, which increases over time. Banks make available to customers both current accounts that also function as term deposits and actual deposit accounts.
The main difference between these two products lies in the fact that the former allow you to carry out all the normal management operations that are included in a current account, i.e. make incoming and outgoing operations, use payment cards linked to the account, withdraw cash and use checks, for example, while in deposit accounts only making is allowed deposit and withdrawal operations.
The methods of opening and managing accounts that allow you to make term deposits vary from bank to bank. Some products are no-fee accountsin which the costs are completely zero and the stamp duty is borne by the bank, others provide for a certain number of free operations per year and still others charge a commission for each operation carried out.
The best way to find the right deposit account for your needs is compare the offers of different banks and check if there are any promotions in progress.
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When should you open a deposit account?
In principle, it is convenient to open a current account with term deposits when:
- you want to make an investment in favor of a minor;
- you want to invest money in a very low-risk operation;
- you have liquidity that you want to make money without having to make long-term operations.
Those who want to obtain a higher return can evaluate the opportunity to open a restricted deposit account: in this case the sums deposited cannot be withdrawn before the expiry of the bond. Usually the constraints have a duration of up to 36 months. In some cases, banks allow you to withdraw the restricted sums in advance, by paying a penalty or by waiving the interest accrued during the period.
In the free deposit accountshowever, the bank undertakes to return the deposited sums to the holder when he requests it, recognizing the interest accrued up to that moment.
The savings deposit is an investment transaction suitable for those with a very low propensity for risk. In addition to having an rsure yieldthis financial product is also protected by guarantee from the Interbank Deposit Guarantee Fundwhich covers investments of up to €100,000 in the event of bank default.
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How to manage the account through the savings book
Each deposit account is associated with a saving account: this is the document on which all deposit and withdrawal operations made over time are noted. The savings deposit book is nominal and, in the event that the deposit account has been opened in favor of a minor, it will be in the minor’s name.
Sometimes banks provide customers with one payment card that replaces the paper passbook and which can be used to make deposits into the account or to withdraw cash within the limits set by the contract. Through the home banking service it is also possible to check the list of operations that have been carried out on the account and check the amount of interest accrued on term deposits.
