3 Basic Characteristics of Deposit Product

To discuss the bank and its products, looks weird if we do not discuss fix deposit products. This most reliable bank's product is not separated from the life of our investment. Almost everyone associated with the banking surely recognize this product. Few years ago when the investment product has not as many as now, bank deposit product is a main investment tool of almost every person to optimize their funds or financial life.

Now the the question is whether we still eligible to invest in deposits? with all its more or less, what is the proper strategy used in investing in the deposit?

Basically, investing is always associated with the financial goal to achieve in particular. Each person has certain goals will be easier to determine which vehicles will be used to reach it. Deposits is essentially the investment vehicle. So, if we know the objective, then do not be afraid selecting deposit as your investment tool.

Let's find out the characteristic of bank's deposit product:

1. Risk
In some countries, deposit usually could be the only investment product that has kind of government guarantee through institution of savings. The other guarantee given is nominal placement guaranteed same as you disbursement. Many products give high results, but not necessarily guarantee a nominal amount will be the same as first placement, especially when melted before a period of time expires.

2. Liquidity
In particular, a lack of deposit is because having a period of time to disbursement or cashing the money invested before. However during the time being, this product has been modified into a product that can be cashed in a matter of time shorter. Ranging from 'deposits on call' that can be cashed out in a matter of 3 - 14 days, until the product can be cashed each time. Moreover this process done in just in hours or even minutes.

It is true that stocks also can be cashed at any time accordance your wishes, but we must be ready of the risk occurred. The nominal value can be lower than the placement. Property investment also can ensure higher returns from the initial placement, but is is after running more than 5 years.

3. Result
Talking of results, deposit may not given higher result than other any aggresive investment product. However, at this time a lot of deposits (banks) that are 'brave' is published with a higher interest rate of guarantee, for example a foreign banks determine the interest rate up to 12% per year. If we believe in the management of the bank, the strength of capital and assets held, why do not we brave? Because the government bonds also have no written government guarantee beside we believe the government will not be broken a promise.

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