How to increase profitability without exposing savings to higher risk
The great chimera of any investor is precisely to get more for their money, without having to assume greater risks, neither on the initial investment nor on the final profitability. For this we have two options.
On the one hand there are the combined deposits , which combine a part of the fixed-term investment, with another part on variable funds and the referenced deposits that will give us the promised interest if the underlying index (the reference value) behaves according to a forecast . In the event that the expected evolution of these indices is not met, the return of the referents will be drastically reduced, sometimes reaching 0%.
On the other hand, we can look beyond our borders to see who can give us more for our savings. There are banks abroad with interest rates that can even double what Spanish fixed-term deposits give.
What you need to know before looking for fixed term deposits abroad
If we finally decide to take our money out of the country, there are some fundamental points that we must take into account, since they can spoil that extra profitability of our fixed term:
– Taxation. Each country has a different fiscal policy that must be known beforehand in order to avoid unpleasant surprises. Switzerland, for example, will charge us 35% of the benefit we get (compared to the 20% charged in Spain), which would then have to subtract another 20% that will remain the Spanish state.
-Warranty. Normally deposits are usually covered insured up to a certain amount (€ 100,000 in Spain and almost all EU countries), but this does not have to be the case in all countries. It can be both a public institutional guarantee, such as the Spanish Deposit Guarantee Fund, or private (which diminishes the guarantee since it is more difficult for a state to break down than a company).
-Currency exchange. Unless we hire a deposit 100% in euros, when we change currencies we expose ourselves to risk by the exchange rate; this can work in both directions: it can make us win or lose money, depending on when we make the change.
-Socio-political stability. We will find high interest rates in countries that are experiencing sociopolitical difficulties, since there is a high real risk of default. Banking entities from countries like Iran can offer up to 20% today.
Fixed-term offers abroad
We can highlight deposit offers from interesting foreign banks in other countries. Those that appear in the following table present the same guarantees as the national ones but with the advantage that their interest is much higher.
Deposit to 5 years J & T Banka
|Facto 5 year deposit||1.66% APR||
|Atlantic Tank Europe 5 years||1.64% APR||