Bank deposits are the first choice for many people because they are safe, stable, and convenient. However, did you know that in the process of bank deposits, you may encounter some "new routines", which will affect your deposit returns, and may even face the risk of loss of principal.
Recently, quite a few people have been fooled and become "victims" of bank deposits. So, what are the "new routines" of bank deposits, how do they affect your deposits, and how can you deal with and avoid them?
"New routine" 1: Deposit becomes insurance
You might think that a bank deposit is just putting money in the bank and then getting interest at an agreed interest rate, which is simple and straightforward. However, some banks will bundle deposit business with insurance business, and introduce the so-called "deposit insurance", which is actually an insurance product oriented to wealth management.
The characteristic of this type of product is that when you make a bank deposit, it is actually equivalent to buying an insurance, so as to obtain a certain amount of protection and income. It sounds appealing, but there are actually some downsides.
First of all, this type of product is not a bank deposit, but an insurance product, so your deposit is not protected by bank deposit insurance, and if something happens to the bank or insurance company, your principal may be at risk.
Secondly, the term of this type of product is generally relatively long, and if you want to withdraw it halfway, you may face higher fees or liquidated damages, which will affect your liquidity.
Thirdly, the return of this type of product is not fixed, but depends on the investment performance of the insurance company, and if the investment fails, your return may be lower than expected, or even a loss.
Therefore, if you choose this type of product, you must read the terms of the contract carefully, understand the characteristics of the product, the term, the level of income, the scope of protection and other information, do not be confused by the temptation of high returns, and choose according to your actual situation and risk tolerance.
"New routine" 2: The expected return is not equal to the actual return
You may think that the interest rate on bank deposits is fixed, and as long as you follow the term and amount of the deposit, you can calculate the return on your deposit, which is very clear.
However, some banks have launched some structured deposits or other wealth management products that claim to give you a higher expected return and make your deposits grow faster. However, you should note that the expected return is not equal to the actual return, and these products are often subject to certain risks and uncertainties.
The so-called structured deposits or other wealth management products are part of your savings that the bank takes out to invest in stocks, bonds, foreign exchange and other high-yield varieties, if the investment is successful, your income may meet or exceed expectations, but if the investment fails, your income may be lower than expected, and even the principal may be lost.
Therefore, if you choose these products, you must carefully assess your risk tolerance, do not be confused by the temptation of high returns, read the product manual carefully, understand the characteristics of the product, the period, the level of return, the risk level and other information, and choose the right product for yourself.
"New Routine" 3: Automatic rollover affects returns
You may think that the interest rate on bank deposits is based on the maturity of the deposit, and the longer the deposit, the higher the interest rate, so you will choose to save a long-term fixed deposit to get a higher yield.
However, you should be aware that if you choose the automatic rollover method, your deposit earnings may be affected. The so-called automatic rollover means that when you deposit money in the bank, you choose to automatically roll over the money deposit after maturity into the same fixed deposit product as before. This method seems convenient and saves you the trouble of manual dumping, but it also has many drawbacks.
First of all, auto-rollover will reduce your choice, if you encounter a higher interest rate on other bank deposits, a change in the idle period of funds, or a better way to manage your money, etc., you may want to replan your funds to maximize your returns, but auto-rollover will make you lose this opportunity.
Secondly, automatic rollover will make your deposit income affected by interest rate fluctuations, and if the bank's interest rate fluctuates significantly, automatic rollover may reduce your deposit rate, which will affect your income.
Thirdly, automatic rollover will affect your liquidity, and if you want to withdraw it in the middle of the process, you may face higher fees or liquidated damages, which will affect the efficiency of your capital use.
Therefore, if you choose automatic rollover, you must carefully read the bank's automatic rollover terms, understand the term, interest rate and early withdrawal regulations of the rollover, and do not blindly choose automatic rollover, but choose according to your actual situation and income expectations.
epilogue
In short, although bank deposits are a safe, stable and convenient way to manage money, they are not without risks and drawbacks. In the process of bank deposits, you may encounter some "new routines" that will affect your deposit returns, and may even face the risk of loss of principal.
Therefore, when you choose a bank deposit, you must stay sensible, do not be confused by the temptation of high returns, read the contract terms and product manuals carefully, understand the characteristics of the product, the term, the level of income, the risk level and other information, and choose the product that suits you.
At the same time, you should also pay attention to risk avoidance and avoid unnecessary losses. There will be no pie in the sky, there are both risks and returns, everything is within your means, and the same is true for financial management.