Deposit products are often alternatives ideal savings. Deposits have higher interest offers than ordinary savings interest. Deposits are deposit products in banks whose deposit and deposit can only be made at a certain time.
There are several types of deposit products that can You choose as investment instruments, which are term deposits, on call deposits, deposits whose term is short, and certificates of deposits with a term of 1 year or less. The difference from each of these ’96 deposits lies in the period and facilitation in its retrieval as well as its setup.
Deposit Weaknesses You Need to Know
Let’s take a look at the weakness Deposits.
Low Imbal Results
Deposits are said to be a form of the most secure or investment tool. However, in exchange deposits did not yield a high return.
Return like high risk h investment principle return, the higher the risk level then it will be as high as the return on investment that it can be. Deposits can be said to have the lowest return on investment from the overall investment form, when compared to both stocks and bonds.
Weak Against Inflation
Deposits have a direct impact on a happening flange. As high as the value of interest held by the deposit is, in the event of inflation then the value is meaningless. For example, Indonesia in 2015 had inflation of 5.9% while the average of the interest rates at the time of deposit was 3,5% to 5.5%.
In the presence of such inflation the value It has a deposit as if it has no impact on the increase at all. Thus one of the drawbacks when using the Deposits must be to ensure that the State is not undergoing severe inflation.
Value of Investments That Will Not Grow
The term deposit has no choice to increase the value of its investment. It is affected by no involvement at all that the customer has in the management of the fund. Customers can only view the value based on the standard set against sense of value.
Absence of involvement held by costumer certainly has the impact of lack of supervision of results. It constitutes a ’93grey area’94 region against its value. This value is reduced by the presence of taxes and the cost of managing banks on these deposits, so the value obtained is relative small.
Minimum Settlement Presence
The term deposit has a min deposit limit to be fulfilled. It is the same as opening a new bank rekekning where there is a minimum deposit limit that must be met. Differences with ordinary savings, deposits require a minimum deposit ranging from Rp5 million. However, the policies vary, and each the bank has its respective policies.
Setting constraints that must be entered there is certainly consideration of each particular bank. Thus its nature is subjective and lacks a definite standard in the determination of the minimum deposit deposit policy.
Term of Deposit
Term of deposit held by deposit within 1, 3, 6, 12, or 24 months. The period is used for the retrieval of deposit proceeds. Regarding those time frames needs to be taken into account, because different time frames certainly differ in profit. Therefore you must adjust to the planner your finances , when and how will use those deposits.
Allocation of use of deposit funds is necessary noticed especially in the period of its use, since deposits can only be enjoyed according to a predetermined time by the customer. When the customer is to use the deposit before the due date, a penalty shall be imposed. The determination of the deposit deposit time has an effect on the disbursement of depositary funds, where a penalty is to be paid then the resulting profit is not maximized.
Thus are some of the weaknesses of the instrument this deposit investment. Before starting the investment it is good if you study the advantages and disadvantages of each of the existing investment instruments.