Investing your money allows it to grow over time. It can also help in case of emergencies, making you less dependent on borrowing when unexpected things happen. However, we understand that security is of utmost importance when it comes to wealth management.

In this article, we’ll go over two of the most secure investments: fixed-term deposits or savings accounts.

In times of economic uncertainty and instability, it’s best to preserve your wealth rather than risk it. Fixed-term Deposits and Savings Accounts are both profitable ways to preserve and generate wealth, but they work differently. In order to choose the one that is most profitable for you, you can analyze different aspects which we’ll cover next.

What is a fixed deposit?

A fixed-term deposit might be a good savings strategy for you if you want to avoid loss of earnings from volatile investments, and you want the security of a fixed rate. A term deposit is a low-risk investment option that offers guaranteed returns. It’s a great saving strategy whether you want to use it as a nest egg for the future, or just save up a little disposable income. This is why they’re so popular with retirees, who like the security of knowing exactly what their money’s going to be worth.

A term deposit is useful if you need assistance not to withdraw your savings. Penalties for early withdrawal keep you from dipping into them inappropriately and helps you leave your emergency fund for real emergencies.

What is a savings account?

A savings account is another very popular tool to grow your personal or business wealth. It is usually more flexible and accessible than a term deposit. Think of a savings account as a place to park your money that can easily be accessed when you need it. It comes with no penalties for withdrawing money and gives you better rates than a regular savings account. However, you’ll need to be aware of any requirements you need to meet to score bonus interest, which might include making no withdrawals or a minimum deposit in a month.

The tradeoff for this added flexibility is that a savings account has a variable interest rate attached. The amount of interest you earn goes with market rates.

Which is more profitable,

fixed-term deposits or savings accounts?

Interest rates and often similar on fixed-term deposits and savings account. The difference comes when markets move. When rates are dropping a term deposit might look like a better alternative as the interest is fixed, but it would not be so attractive when the rates are rising. A savings account would have the opposite effect, you might be worried when rates start to drop, but rising market rates would look like great news.

It all comes down to your budget, plan, and financial goals. If you need help, Altarius offers you a professional and personalized service.

When investing, your capital is at Risk