How a deposit differs from a savings account

Что такое вклад

A deposit is funds held in a special bank account, the terms of use of which are specified in an agreement (contract) between the client and the credit institution. For using the client's funds, the bank pays a reward in the form of interest on the amount. In this case, the term of the deposit, the terms for withdrawing funds, and the possibility of top-ups are stipulated.

Deposits are of the following types:

1. Fixed-term – with a set validity period.
2. Without a fixed term – the client can top up the deposit or withdraw funds from it at any time, while the interest rate will be minimal.

Among the fixed-term category, two subcategories are distinguished, namely savings and accumulation. A savings deposit is intended for capital preservation and growth. When signing an agreement with the bank, it will not be possible to add money to the account or withdraw it. These restrictions are offset by attractive interest rates. Savings accounts allow top-ups, but there may be limits on the amounts and timing of deposits. 

All deposits are insured by the state, so if the bank goes bankrupt, the client is guaranteed to receive compensation.

Что такое накопительный счет

Such a banking product is similar in terms to a demand deposit, with no fixed term.

The feature of a savings account is that money can be withdrawn from it at any time without loss of yield. You can also increase the amount stored in the account. A feature of savings accounts is that they have an increased interest rate. It is lower than that of a standard deposit, but higher than that of a demand deposit. As a rule, it ranges from 4% to 5% per annum. Most often, banks offer to open such accounts in Russian rubles. 

Funds in citizens' savings accounts are also insured by the state in the event of the financial institution's bankruptcy.

Such a product is beneficial for those who store large amounts but use the funds frequently. In some cases, savings accounts are linked to bank debit cards. This is convenient, but increases the risks of money being used by fraudsters. 

Отличие банковского вклада от накопительного счета

The main differences between the banking products:

• a deposit has term limits, while a savings account does not;
• any savings account can be topped up, while deposits often do not provide such terms;
• a deposit has restrictions on the opening amount;
• upon early withdrawal of funds, the high interest rate on a deposit is lost, while on a savings account it remains.

These are the main differences between a deposit and a savings account, but there may be differences depending on the terms offered by the credit institution.

Преимущества и недостатки накопительных счетов

The main advantages of a savings account include:

• the ability to withdraw money or top up the savings account balance at any time without changing the interest rate;
• convenient and favorable terms – the interest rate on savings accounts is often higher than that of demand deposits;
• no opening amount restrictions.

A significant disadvantage is that savings accounts offer a lower interest rate compared to many deposits. Also, most often they can be opened exclusively in Russian rubles.

Преимущества и недостатки вкладов

The main advantages of deposits include:

• good additional income achieved through a high rate;
• the ability to open a multi-currency deposit and protect yourself from exchange rate fluctuations;
• convenience of processing – a deposit can be opened via the online banking personal account;
• fixed interest rate.

Deposits also have disadvantages; for example, most often money cannot be partially withdrawn without losing the established rates. Also, to open one, you must deposit a minimum amount that is not affordable for everyone. Far from in all cases can you top up a deposit to increase the amount of interest income. 

Keep in mind that the maximum amount that can be compensated by the state in the event of the bankruptcy of a credit institution is 1,400,000 RUB. If you plan to make a deposit for a larger amount, distribute the funds among several banks so as not to lose them.  

A deposit and a savings account are convenient banking products that have their own pros and cons. It is quite difficult to say which product is better. If a person has a large sum of money that they definitely will not need in the near future, it is better to choose a deposit. This will make it possible to get a higher income due to maximum interest rates. If finances may be needed at any time, it is better to choose a savings account. This tool is suitable for short-term investing. You can withdraw money from a savings account at any time just as easily as depositing it to increase profit. In both cases, the money is protected, and the state is guaranteed to return it in the event of the credit institution's bankruptcy or if the bank's license is revoked.