Deposits

There are lots of different deposits in the Netherlands. To put your money for shorter or longer periods but what are deposits really?

Deposits: everything you need to know

A deposit is a form of savings where you put money away for a certain period of time at a guaranteed interest rate. This means that you cannot dispose of your money during that period, but you will receive a fixed return. Deposits come in different shapes and sizes, with different maturities and interest rates.

Why a deposit?

There are several reasons to choose a deposit:

  • Safety: Your money is guaranteed up to €100,000 per account holder per bank by the Deposit Guarantee Scheme.
  • Fixed return: You know for sure what you will receive in interest, regardless of fluctuations in the financial markets.
  • Simple: Deposits are easy to open and manage.

The different types of deposits

There are different types of deposits:

  • Term deposit: This is the most common form of deposit. You tie up your money for a certain period of time, such as 1 year, 3 years or 5 years.
  • Savings deposit: This is a deposit with a variable interest rate. The interest rate can change during the term of the deposit.
  • Call deposit: This is a short term deposit, usually up to 1 year. You can withdraw your money mid-term, but you will receive a lower interest rate.
  • Index deposit: This is a deposit where the interest rate is linked to an index, such as the AEX.

The benefits of deposits

The benefits of deposits are:

  • Safe: Your money is guaranteed up to €100,000 per account holder per bank by the Deposit Guarantee Scheme.
  • Fixed return: You know for sure what you will receive in interest, regardless of fluctuations in the financial markets.
  • Simple: Deposits are easy to open and manage.

The disadvantages of deposits

The disadvantages of deposits are:

  • You cannot dispose of your money in the interim.
  • Interest rates tend to be lower than stock returns.
  • Deposits are not suitable for investors looking for high returns.

Tips for choosing a deposit

  • Compare interest rates: Interest rates on deposits can vary by bank. Compare interest rates before opening a deposit.
  • Choose the right term: Choose a term that suits your savings goals.
  • Pay attention to the terms: Read the terms and conditions of the deposit carefully before opening it.

Deposits are a safe and easy way to save. They offer a guaranteed return, but you cannot dispose of your money during the term. Deposits are suitable for investors looking for a safe investment with a fixed return.

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