One of the relatively popular investment tools is the deposit. This investment tool is suitable for those who do not like high risks. This is because these deposits carry a lower risk compared to other instruments such as stocks.

Fixed deposits are divided into three types, one of which is widely used by Indonesians is fixed deposit. This time we will discuss in detail what fixed deposit is, its advantages, advantages and how it works. For those who wonder Please read the following article to the end!

Definition of Fixed Deposit

Fixed deposit is a type of deposit that lasts for a certain period of time. Usually between 1 and 24 months, withdrawal of deposited funds is agreed between two parties, the customer and the bank providing the deposit service.

Fixed deposits can be issued on behalf of institutions or individuals. So many people save money on this instrument. The person who can withdraw money is the name listed on the billet. The disbursement process is quite simple. It can be transferred directly to the customer’s account after deducting the tax payable.

Fixed deposit benefits

After knowing the meaning of deposit time The benefits of time deposit will be explained. Using this tool is useful to experience:

1. Get a high interest rate return

The first benefit when you decide to deposit some money in a recurring deposit is that You will be rewarded with a relatively high interest rate. This is one of the reasons why some people prefer to deposit money into a savings account over a regular savings account. you can choose Banks with the highest interest rates on deposits.

This high interest rate is 3 times the interest rate you get when you put these money in a savings account. The reason is that the savings and deposit process is almost the same. But you will get returns in the form of higher interest rates.

2. Can be used for short-term financial goals

in financial management You need to divide your financial goals into two categories. short term and long term If you intend to achieve short-term financial goals One of the tools that can be used is a fixed deposit.

Because the period is relatively short, only 1 to 24 months. So you can agree when to withdraw the money. For example, you want to get married next year. This means that you can agree to receive the money and interest 12 months later. This is legal as long as there is an agreement between the parties.

3. Hassle-Free Investment Solutions

The benefit of using fixed deposits is that this tool is a hassle-free investment solution. Because now there are many banks that offer fixed deposit online.

so that all administrative activities can be carried out independently online. So it’s more practical and easier. You still don’t have to worry about coming to the bank. Get in line and spend a lot of time. just use your smartphone

The advantages of fixed deposits

After discussing the benefits Let’s talk about the advantages of depositing time. The following is an explanation

1. The fund has a security guarantee.

Total fixed deposit safe investmentbecause the guarantor is the state Deposits can usually be made through trusted and reliable banks.

From the government’s point of view, $2 billion of deposits are guaranteed through the Deposit Insurance Institutions. So that there is no gap in your lost money or you face a fraudulent investment.

2. Investment made easy

If you think investing is a difficult and difficult thing to do. You should try a fixed deposit. because with fixed deposit You will feel how easy it is to start from management to profitability.

You can also deposit money in currencies from other countries as some banks offer fixed deposits using foreign currency. starting from the euro pound sterling all the way to the dollar Can be used for fixed deposit

3. Suitable for new investors

Fixed deposits are suitable for novice investors. Because the risk of placing money in this instrument is very low, almost none. But the interest rate offered is quite high. so that you can get maximum profit

In addition, new investors often have low risk profileTherefore, it is more appropriate before getting to know many other instruments. You can try a fixed deposit as an alternative.

4. Easier access to flowers

Finally, one of the advantages of using fixed deposits is easier access to interest. Granted, there are certain rules for receiving deposited funds that cannot be arbitrary.

But some banks have been allowing their customers to earn interest on their deposits for some time. There is also a time deposit system. Automatic Rollover (ARO)Or the interest earned will go directly to the deposit. so that the amount deposited increases and the profit is maximized

How do fixed deposits work?

The way fixed deposits work is quite simple. Here’s how fixed deposits work to your knowledge.

  1. When you deposit to make a deposit You will often be asked to state your age or duration, such as 1 month, 3 months, or 1 year to 2 years.
  2. Usually, each period or age used is accompanied by the amount of the interest rate on the deposit. For example, for a 1 month the interest rate is 5.4% while for 3 months it is 5.8%. The amount of interest usually depends on the age. The longer the interest rate The higher the interest rate, the higher the interest rate.
  3. You will only be asked to save money for the specified time. Maybe can get interest But fixed funds can’t. Therefore, at a given age The money must be in the deposit. There is usually a mechanism for fines or penalties if money is deducted before the specified time. The amount depends on the policy of each bank.

This is an explanation of what fixed deposits mean. benefits and advantages If you are suitable and meet your needs and risk profile There is no harm in trying this investment tool. You can get the benefits and advantages mentioned above. Good luck with your fixed deposit!


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