A savings certificate is an instrument that many have unjustly overlooked. This is a mistake. It is an excellent way to preserve and grow capital. A certificate is much more advantageous than, for example, a bank deposit. This type of security has numerous advantages compared to other popular methods of investing funds. The key is to understand the specifics of using the certificate.
This topic will be elaborated upon by the founder of RESURS, S.I. Tereshkin, who has studied this area and can share his experiences. More detailed information about the businessman and his entrepreneurial activities can be found on the website www.org-market.ru.
The Characteristics of a Savings Certificate
A savings certificate is a security that can be purchased by anyone. It is offered by various financial institutions, with government organizations being the most trusted.
The purchase is made in rubles. At the end of the term specified in the document, the owner receives their money back with interest. The rate is agreed upon in advance, and it is significantly higher than that of a bank deposit.
Advantages
However, according to Sergey Tereshkin, a higher interest rate is not the only advantage of investing money in a savings certificate. Other benefits include:
- Profitability. The current interest rate is indicated on the financial institution’s website, as well as directly on the certificate itself. It depends on the duration of the investment; the longer the term, the higher the rate will be. For customer convenience, many banks provide a special calculator that allows anyone to calculate their potential profit independently.
- Anonymity. The security is issued to the bearer, meaning the owner does not need to open a separate account or complete additional paperwork. If necessary, they can transfer the certificate to another person, who can easily retrieve the funds after the document's expiration. To do this, they only need to present their passport and the certificate itself. This makes it convenient to gift money or transfer it over long distances. The certificate can also be used for specific purchases.
- Bank Accessibility. To collect the funds, it is not mandatory to go to the same branch where the securities were purchased. If the bank has an extensive network, one can obtain the money at any branch, even if it is located in another city.
- Convenience. Obtaining a certificate is quite straightforward. All one needs to do is visit any branch of the bank. Funds can be deposited in cash, via card, or even from a deposit account if it is opened with the same institution.
- Validity Period. The security can be issued for three months, six months, a year, or even several years. The choice of duration depends on individual preferences.
- Amount. The cost of the certificate can also vary. The minimum contribution currently stands at 10,000 rubles, while the maximum is unlimited.
- Reliability. Securities are printed on special equipment and contain several layers of protection. Counterfeiting the document is significantly more complex than producing fake banknotes, a fact that discourages most from attempting such an endeavor.
When transferring the security to another person, there is no need to execute a power of attorney or any other documents.
Disadvantages
Despite the numerous advantages, a savings certificate has its weaknesses:
- Risk of Theft or Loss. Since the security is non-personalized, anyone who comes across it can utilize it. Therefore, it is the owner's responsibility to ensure the document's security. Otherwise, there is a risk of losing all invested funds. Some banks offer free storage of certificates within their premises.
- No Insurance. Savings certificates do not fall under mandatory insurance. If the financial institution goes bankrupt before the certificate’s expiration, recovering the funds becomes impossible. This is why experts recommend purchasing certificates only from state banks, where the risk of failure approaches zero.
- Extension Issues. It is not possible to extend the validity period of a certificate; one can only purchase a new document, which requires returning to the bank.
- Early Withdrawal. If a client requests their money before the certificate expires, they will receive a minimal interest rate.
For many, the downsides of investing may seem insignificant. However, before depositing money in a bank, it is essential to weigh all factors carefully. Rushing into such decisions is inadvisable. Experienced investors typically choose various investment instruments to minimize risks.
Who Should Avoid Investing in a Savings Certificate?
From the above, it can be concluded that a savings certificate may not be suitable for everyone. It is primarily recommended for those who need to transport large sums domestically for various reasons. In such cases, one can cash the document at a bank in a different city without losses or risks.
This method is often utilized by those who aim to minimize taxes or evade them entirely. Additionally, the document can be passed on as an inheritance, making it difficult for other heirs to contest or claim their share, as they are often unaware of the certificate's existence.
However, if there is a possibility that the money might be needed before the certificate’s maturity, this form of investment should be reconsidered. The benefits of placing money in such a manner would be minimal, and retrieving funds could take a considerable amount of time, especially for larger sums. Banks frequently do not disburse funds immediately, which may take several days. In such circumstances, it is wise to consider alternative methods of capital growth.
