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How much money do you have? It's a very sensitive question, and it's a difficult question to answer.
Because the money in your hand may not be as much as you think, and it may not be what you really have.
Because the money in your hand is actually a kind of currency, and the value of money is determined by the supply and demand of money.
If the supply of money increases, while the demand for money does not change, then the value of money decreases, which is inflation.
And if the supply of money decreases, but the demand for money remains the same, then the value of money will rise, which is deflation.
What impact does this have on our lives? This means that the money in our hands may become less and less valuable.
So, what should we do? How can we protect our money?
Many people's first instinct is to save money, to save a fixed deposit. Fixed deposit is a common way of financial management, its advantages are safe, stable and simple, and its disadvantages are low returns, poor flexibility and maturity.
In this year and next, saving a fixed deposit may be a very unwise choice, or even a very loss-making option.
Why? These five reasons are realistic. Let's take a look.
1. The return on depositing time deposits is low
Depositing a fixed deposit seems to be a safe way to manage money, but it is actually an inefficient way to manage money.
Why? Because the return on time deposits is very low, even negative.
The interest rate on time deposits is low. There are high taxes on time deposits. When you deposit a fixed deposit, you not only have to bear the loss of low interest rates, but also bear the burden of high taxes.
According to China's tax law, the interest on time deposits is subject to 20% personal income tax, which means that the actual income from time deposits is much lower than the apparent returns.
The opportunity cost of depositing a fixed deposit is high. Saving a fixed deposit not only bears the impact of low interest rates and high taxes, but also the price of high opportunity costs.
This means that if you deposit a fixed deposit, not only will you not make money, but you will miss the opportunity to make money.
2. The risk of depositing time deposits is high
Depositing a fixed deposit seems to be a safe way to manage money, but it is actually a risky way to manage money.
Why? Because the risk of depositing a fixed deposit is very high, even fatal.
Depositing a fixed deposit is a time-limited way to manage money, that is, you have to wait until the deadline expires to withdraw your money.
This kind of liquidity is very poor and very inflexible. This means that if you are in an emergency, you will not be able to use your money in a timely manner.
A bank is not a risk-free institution, and banks can also have problems, such as broken capital chains, failures, takeovers, etc.
If something goes wrong with the bank, your money could be frozen, delayed, or even lost.
3. Alternatives to time deposits
Since the return and risk of depositing a fixed deposit is low, what should we do? How should we manage our finances? How should we protect and increase our wealth?
Actually, we have a lot of options, we have a lot of alternatives. A lifetime deposit is a way to manage money without a term of time.
In other words, you deposit your money in the bank and you can withdraw it at any time without paying any penalty or giving up any interest.
Although the interest rate of such a demand deposit is also very low, it has good liquidity, high security, and strong legality.
This means that if you encounter an emergency situation or a more favorable financial opportunity, you can use or transfer your money in a timely manner.
You won't get stuck and you won't miss out on the opportunity to make money.
Therefore, a lifetime deposit is a wiser choice than a fixed deposit, and it is also a safer choice than a fixed deposit.
Money market fund is a kind of wealth management product that invests in the money market, that is, you can enjoy the benefits of the money market when you invest money in the money market fund.
Although the income of such a money market fund is not high, the liquidity is not bad, the security is not low, and the taxes and fees are not high.
Therefore, investing in money market funds is a more efficient choice than depositing time deposits, and it is also a more reasonable choice than depositing time deposits.
epilogue
This year and next, don't just deposit time deposits, this is a very reasonable suggestion, and it is also a very valuable advice.
This is because there are many and better alternatives to depositing a fixed deposit, which is low in return and high in risk.
We should have a correct understanding of time deposits, and do not rely too much on them or on them.
Actively adapt to the deposit of fixed deposits, neither blindly follow nor insensitively insist. Effectively deal with time deposits, neither passively give up, nor have unlimited expectations.
Depositing a fixed deposit is a topic worthy of our attention and consideration, and it is also a topic that requires our action and participation.
With a rational vision, with scientific methods, with innovative thinking, with a cooperative attitude, to face and solve this topic together, so as to achieve the protection and increase of wealth, to achieve the improvement and promotion of life.
If you have any questions or suggestions, you are welcome to communicate with me.