The central bank base rate, which is currently 0.9%, has been steadily declining in recent years. Correspondingly, the interest rates on loans and deposits decreased. Bank borrowers have been favorably affected by this interest rate reduction process, since the burden of repaying a loan is already much lower. But if we want to start with our money saved, we have to face the fact that we generally have to be satisfied with a deposit rate of around 1 percent. We look at the situation in the term deposit market and show that despite the low central bank base rate, deposit rates above 2% can be found.
If we have saved money
or suddenly we get a significant amount, we wonder what to do with it. Take $ 1,000,000 as an example. This amount is not enough to make buying real estate today the best investment. But it’s too much for one million for us to keep it at home in the drawer in the socks.
We receive several comments under similar articles that “I will never put my money in a bank again, but rather keep it at home!” But what happens when a burglar takes our treasured money? It is clear that we have money in a bank. It is also important that the National Deposit Insurance Fund pays compensation for the money we deposit in deposits in the event of the banks becoming insolvent. The indemnity is equal to or less than $ 100,000 per depositor and per credit institution, ie slightly more than $ 30 million.
Thus, term deposits remain the safest form of savings, and when you make a deposit, you know in advance how much interest you will receive at the end of the term. It is worth comparing deposit offers with a calculator .
Interest above 2 percent, even unconditionally
Looking at the offers of several maturities, we can see in the calculator that you can get the highest interest rate for a 12-month or 24-month deposit by choosing BNP Paribas A Deposit For Future . BNP Paribas offers a 2.40% interest rate on a 24-month maturity period when depositing fresh money . The bank will treat as fresh money the amount that came from sources outside the bank that were not committed within 90 days prior to the deposit date. The calculator calculates that by depositing $ 1 million this deposit can increase our net savings by $ 38,279 over two years.
BNP Paribas offers a good opportunity even if it is not fresh money , as in this case the interest on the Standard deposit will be 2.30%. This translates into a net profit of $ 36,670 over two years. It is interesting that there is no significant difference, the bank gives almost as much interest without meeting the fresh money condition.
It is also important to know that BNP Paribas will pay 30% of the interest in case of a deposit break if we wish to withdraw money within 90 days of the deposit. Clients can manage their deposits online and any transaction can be made online (either by phone or in person) and deposits placed here are covered by the French Deposit Guarantee Fund up to $ 100,000.
What other options are there?
At Marble Bank, we can also deposit our money at an interest rate of over 2% on the Special TBSZ deposit , which currently yields 2.25% interest for a 12-month term. This deposit can only be made through a Long Term Investment Agreement (TBSZ) account, which provides you with interest-free or interest-free tax and health contribution exemptions.
It is also worth mentioning that the interest rate on the Marble Bank Variable Deposit is linked to the MNB base rate , so that with the change it may decrease or even increase the interest rate of the deposit over the term. We currently expect a 1.65% interest rate on this deposit, which gives a net interest of $ 13,035 at the end of the 12-month period, calculated at $ 1 million.
You can find combined deposit offers at several banks. For example, an option where you need to buy a unit or Hungarian government bond for twice the amount deposited in order to get a high interest rate. An example of such an investment offer is CIB’s Gold Deposit , where the bank gives a 3% interest rate on the deposit portion, which is outstanding for the 2-month maturity. If you choose this option, you will receive a net interest of $ 2,930 over a 2-month period on the deposit portion of the deposit.
In the case of offers combined with an investment certificate or a bank bond, or even life insurance, it is important to know that their yield may vary depending on the yield of the investment instruments in the fund or bond. The maturity of bonds and mutual funds required as a condition of the special interest rate may be several years, which can significantly exceed the maturity of the deposit part. It is advisable to invest our money in such combined investments only if we are fully aware of the characteristics of the assets they contain.
What are the deductions?
We should always deduct the current 15 percent interest tax from the gross interest rate unless we deduct the money from TBSZ. Interest income also requires a 6% health contribution (eho). An exception to this is government securities issued in $ in the $opean Economic Area (hence Hungarian). We can save this money only if we open a long-term investment account (TBSZ) and our deposits bear interest thereon for at least 3 calendar years.
We can then save the interest tax on a TBSZ account. At TBSZ, after 3 full calendar years after the account opening year (collection year), 10 percent of the interest is deducted from tax instead of 15 percent, and after 5 full calendar years, the interest tax is 0 percent.
That is, if we open a long-term deposit account in 2016, 2016 will be the start year, ie the collection year. Savings can only be credited this year (31 December 2016). From 2017 onwards, you will not be able to make or withdraw payments, you can only change the composition of the savings on your account. For example, if the amount is only held for half a year, it can be re-tied to another form of deposit. However, neither the amount originally deposited nor any interest that may be payable in the meantime may be charged without breaking the account. We can fund you for the first time on December 31, 2019 without losing your tax deduction (this is when the first 3 full years of savings are completed). At this time (December 31, 2019), the bank will deduct 10 percent interest tax.
If you keep the money in your account
For 5 full years after the starting year (31 December 2021, as in the example), you will be able to charge the full interest without deduction. On the go, we can transfer our TBSZ account to another bank if they get a higher interest there, and we can launch a new TBSZ account every year.