In case you want to deposit a certain sum of money, you can appeal to a current account, a term deposit or a savings account.
Current account, called demand deposit, is one of the most used accounts availability. Interest rates on current accounts are small, usually zero.
Savings are the best known and used savings products that allow individuals to obtain attractive interest rates for amounts invested. Most commercial banks' deposits both in lei and the euro and other currencies for maturities from one month to one year and even more.
Interest on deposits is directly dependent on the chosen term. As the period is extended, the interest rate is higher.
Term deposits benefits, usually to guarantee the Deposit Guarantee Fund in the Banking System.
Deposit interest is calculated daily, but paid in advance, monthly, quarterly, annually or on expiry of storage. Deposits with capitalization, the interest rate is calculated every month not only to the deposit amount, but also the already accrued interest.
How term deposits work?
Term deposits are classified as follows:
a) depending on the method of payment of interest:
- Deposits with capitalization: periodic interest is added to your initial deposit.
- Term deposits without capitalization: monthly interest constitutes a current account holder provide them access to it; if the client withdraws the deposit before maturity of the deposit, the interest rate applied will be lower (interest on current accounts).
b) depending on the option to renew the deposit on the same term as the original:
- If you opt for automatic renewal at the end of the deposit, the deposit extends automatically. In addition, if the deposit has the option of capitalization of interest, the interest is added to your initial deposit. For the next period, the interest rate will apply to the original amount plus interest rate obtained on the previous period.
- If you do not want automatic renewal, the deposit will be due only, ie maturity deposit amount will be transferred into the current account (which will calculate the interest on demand) or the amount will remain in the same account, but without interest.
c) depending on interest:
- Term deposits with variable interest: the bank can change the interest rate on the deposit period, depending on market developments.
- Term deposits with fixed interest: the bank provides a fixed interest rate on the deposit period regardless of market developments.
Accumulation account (or savings) is a repository that provides permanent access to money from the account, deposits and withdrawals frequently repeated without being affected interest.
If a term deposit if you withdraw money before maturity, you will be penalties and you lose the accrued interest, as it is stipulated in the contract.
In general, interest rates for term deposits interest rates are higher than for the accumulation accounts.
