This is not the time for risky investments. The principle is simple. When the economic situation is going well, when we can talk about general prosperity, one can be tempted by slightly more risky ways of depositing capital.
Things are very different when it comes to crisis. Unfortunately, the economy has been struggling with the crisis for almost 7 years.
So it’s not a good time to take risky actions
In a crisis, the most important thing is to protect money against inflation. Security above all. That is why the popularity of bank deposits is so huge. Poles also value simple rules for the operation of bank deposits.
They know how much they will pay, for what period and what profit they can expect. Speaking of potential profit, interest rates should also be mentioned. Profit depends on this last factor.
What interest on the deposit
Finance experts recommend fixed interest rates for short-term deposits. After a few months of the deposit, you know how much money you will earn. The variable interest rate is mainly recommended for those who decide to open long-term deposits. Profit after the end of the contract is one unknown.
The variable interest rate depends on many different factors. Most often, WIBID and WIBOR rates are taken into account when calculating the interest rate. The policy of the National Bank of Poland also has an impact on the interest rate.
When it raises interest rates, the return on deposits will be higher. We will learn about the interest rate we can count on in a given bank or which policy a given institution is by reviewing the regulations of a given institution.
Variable or fixed interest rate
When, as a result of the Monetary Policy Council, interest rates go down, the bank will react immediately by lowering interest rates on deposits. Holders of short-term deposits will feel the fastest. With a quarterly deposit, the interest rate reduction in the second month of the deposit does not give a chance to correct losses.
In turn, such chances are given by a long-term deposit with a variable interest rate. By the way, not many banks offer variable interest rates for short-term deposits.
Therefore, as it was said before, it is better to opt for variable interest rate for long-term deposits. The variable policy of the Monetary Policy Council over a dozen months gives a chance to make up for the losses.