We hear about it more and more recently, and there is a reason: the poor economic health conditions of the “Italian System” mean that more and more people want to put their savings away from financial storms, which is why the expression “deposit account” has become part of everyday talk.
What are deposit accounts
Current accounts, support accounts, deposit accounts … There is a risk of confusion. In reality it is simpler than one might think:
The current account is the common bank account that arises from the relationship between the credit institution and the client: the first guarantees the second that it will “keep” its money, allowing in exchange some operations such as withdrawal, deposit, crediting of salary, instruction of a transfer and so Street. In exchange for this “concession” to keep the client’s money, the bank will guarantee a periodic interest rate and some services or gifts.
The deposit account represents a particular type of cash custody, for the terms of which the customer agrees not to touch the sum deposited for a certain period of time (in this case we speak of “restricted deposit account”) or we are free to use it at any time (“free deposit account”). The only transactions allowed in a deposit account are withdrawals and deposits. Where’s the advantage, then? In the fact that the banks grant extremely higher interest rates for a deposit account.
The support account is nothing more than the common current account if a deposit account is opened. In fact the deposit account can be turned on only in the presence of an ordinary current account (also in another bank). This rule prevents wild speculation, serves to educate customers less in-depth about financial transactions that otherwise would think they could open deposit accounts left and right and finally guarantee an economic return to the bank itself.
How the deposit account works
While in the case of the traditional current account this serves daily and living expenses such as bills, mortgage payment and so on, the deposit account can be agreed when you want to make a small sum of money that otherwise would remain firm on your CC.
The sum can also be medium, or large: but in the case of important “hoardings” it goes without saying that a financial consultant can direct his client towards other types of investments, such as the purchase of real estate.
In the case of deposit accounts, the bank manages the amount entrusted to it by investing it to return it. The result is higher interest rates than a normal account: we are halfway between pure savings and stock exchange (to simplify).
Are there risks?
No investment transaction (because of this) is unforeseen, the most serious of which could be the bank failure with which a deposit account has been opened. In reality, however, Italian current account holders are protected by an EU directive, the 2009/14 / EC which created the Interbank Deposit Protection Fund: if your investments (in a normal bank account or deposit) do not exceed 100,000 euros, in case of bankruptcy you will be fully reimbursed. It is the law.
How to recognize a good deposit account
The first piece of advice for recognizing an optimal deposit account is to do just what is most unwelcome to many consumers: read the terms thoroughly before signing a contract. This is because the banks do not hesitate to propose extremely generous terms to grab new customers
(this is also true for the common current accounts, moreover) except to specify that the conditions in question are valid only for the first year of operations (or other time interval chosen by the bank).
Another important parameter is the so-called “capitalization method”: this is the way in which the bank pays interest. Some do it at account opening, others only at regular intervals. Better the first: that money can be immediately reinvested.
The costs to be incurred are the third and fundamental parameter: the deposit accounts are an advantage also for the host bank, but many ask for a periodic sum (annual, monthly …) which can be much higher than the management costs of a CC normal.
Amount of expenses and conditions granted (interest rate applied, duration of the restriction in the event of a restricted deposit account …) are variables that change together with the market, or very frequently.
Impossible to indicate a deposit account that could be perfect today but very disadvantageous tomorrow: to help consumers, however, there are always up-to-date online comparators, who put these features black and white and assist in making a reasoned and informed choice.