Deposit Advantages

Benefit of Fixed Deposit Over Regular Savings Account

Deposit Benefits – Benefits of Deposits - Starting to be interested in deposits, but not yet sure because you don't really understand the benefits and advantages of deposits? So, through this article you don't need to hesitate anymore to start saving deposits. In this article, Whiz will explain 7 advantages of deposits compared to regular savings. Before that, you need to know what a deposit is? Deposits…

But first, do you know what a deposit is? A deposit is a financial product offered by banks or other financial institutions. Customers deposit a certain amount of money in the bank to be stored for a specific period. This period can vary, starting from 1 month, 3 months, 6 months, 1 year, or even longer.

Now, deposits have several advantages compared to regular savings accounts. Let's explore 7 deposit benefits compared to savings.

Also Read: Tips for choosing reliable deposit interest rates

7 Benefits of Deposits You Need to Know

1. Higher Interest Rates

Deposit Advantages

The main advantage of deposits is the tendency to have higher interest rates compared to other banking products, such as regular savings accounts.

Deposit interest rates are generally higher than regular savings account interest rates. While regular bank interest rates range from 0.5% to 3%, deposit interest rates can reach 5% to 7% per year. This makes deposits an attractive option for those seeking higher profits than regular savings.

2. More Stable and Clear

Customers know exactly how much interest they will receive during the deposit period. Thus, deposits provide stability and clarity in financial planning, allowing you to plan future expenses and investments more effectively.

3. Fixed Term

Deposits have a predetermined term or tenor, such as 1 month, 3 months, 6 months, 1 year, or longer. This allows you to plan short or long-term finances, depending on your financial goals.

However, you will experience the full benefits of deposits with long-term planning.

4. Protected from Market Fluctuations

Deposit Advantages

Because the interest rate on deposits is fixed for a certain period of time, deposits are protected from market fluctuations or changes in interest rates that may occur in the future. Your funds saved in deposits will not experience a decrease in value when the market is volatile and the interest generated will remain stable according to the term of your deposit.

5. Guaranteed by the Deposit Insurance Agency

The money deposited in deposits is usually guaranteed by Indonesia Deposit Insurance Corporation (IDIC) up to a certain limit. This provides additional security for customers against the risk of capital loss.

However, not all deposits are guaranteed by the IDIC. It is essential to note that deposits guaranteed by the IDIC cannot exceed the IDIC guarantee interest rate. If the deposit interest rate is higher than the IDIC interest rate, the deposit is not guaranteed by the IDIC.

The guaranteed interest rates for deposits vary depending on the type of bank as of December 2023. For example, for commercial banks, the guaranteed deposit interest rate is 4.25%, and for foreign currency deposits (valas), it is 2.25%. Additionally, for BPR, the guaranteed deposit interest rate is 6.75%.

6. Flexible Term Options

Although deposits generally have a fixed term, many banks also offer deposits with more flexible term options, allowing you to choose a period that suits your needs.

7. Separate Funds for Specific Purposes

Deposit Advantages

Many people use deposits to store separate funds for specific purposes, such as a child's education fund or an emergency fund. This helps in separating and allocating funds according to individual needs while still earning a profit.

Also Read: Take Care of Your Finances and Privacy: Beware of Scam Modes

Those are the 7 benefits of deposits that you can enjoy. Before deciding to save, make sure to consider your financial needs and goals.

If you're confused about which deposit product is safe and profitable, you can try Smart Saver Deposits and get a 6.75% interest rate. Great, isn't it? Moreover, you don't need to worry about security because Whiz collaborates with partner banks registered with the Otoritas Jasa Keuangan (OJK) and are participants in the IDIC guarantee.

Let's maximize your money potential and get profit!