Is it worth keeping money in the bank in a deposit now?.

In Ukraine in 2024, the conditions for any investment are quite complex. This includes deposit accounts. The main question is whether to keep money in the bank and how risky it is. 

When considering whether to keep money in the bank, it is essential to weigh all the pros and cons. After all, money in a deposit can be lost, and affording such risks in 2024 in Ukraine is incredibly challenging. 

Should one keep money in a deposit? 

The question of whether to keep money in the bank now is quite complicated in any year. When war continues in Ukraine, the situation is only exacerbated. Many think it is conditionally safe to keep money in the bank. However, depositing funds is not as simple as it may seem at first glance. 

Let's start with the fact that keeping money in a deposit is the process of placing funds in a bank for a specified term with the aim of earning income in the form of interest. In Ukraine, this instrument is popular among citizens as it allows for the preservation and increase of savings, especially in times of inflation.

How deposits work in Ukraine:

1. Choosing a deposit. Deposits can be short-term (up to 1 year) and long-term (over 1 year). The choice of term depends on the depositor's goals and the expected interest rate. Deposits can also be opened in hryvnias, US dollars, euros, or other currencies. Hryvnia deposits usually have higher interest rates compared to foreign currency deposits.

2. There are several types of deposits in Ukraine. Deposits can be term (with a fixed term) or on-demand (with the possibility of partial or full withdrawal at any Time).

Special attention should be paid to the interest rate. For example, the interest rate remains unchanged throughout the entire deposit term. This is the most standard option. There is also another type of rates where the rate may change depending on market conditions or other factors.

How to place a deposit? 

Placing a deposit is a simple and straightforward process. First, one should open an account in a bank. The client chooses a bank, signs a deposit agreement, and deposits money into the deposit account. This is not complicated, and if necessary, bank employees will assist with both opening an account and placing a deposit. 

Next, interest may be calculated on a monthly basis or at the end of the deposit term, depending on the terms of the agreement. Some banks offer the service of automatic renewal of the deposit for a new term upon expiration of the current one. This process is cyclical and standard for the entire process while the deposit is active. 

If it is necessary to withdraw money, the depositor can receive the entire amount of the deposit along with the accrued interest. This process is also straightforward. Another option is if the depositor decides to withdraw money before the deposit term expires, in which case the bank may reduce the interest rate or withhold part of the interest, depending on the terms of the agreement. All these conditions can be discussed before placing the deposit. 

Whether or not: risks and advantages of deposits in Ukraine 

In 2024, quite favorable offers for deposits can be found in various banks in Ukraine. The most attractive conditions are offered by banks such as PrivatBank, Ukrgasbank, and Oschadbank. Average interest rates on deposits in hryvnias range from 12% to 16% per annum, depending on the term and conditions of the deposit.

Against the backdrop of inflation expectations at the level of 8-10% and the stabilization of the National Bank of Ukraine's discount rate within 14-16%, deposit rates may remain at current levels throughout 2024. For short terms such as 3 months, the average rate is about 14.11%, and for six-month deposits – 14.14%. The choice of a bank for a deposit depends on the specific conditions, such as the deposit term, currency, and additional services offered by the bank. 

Like any investment with future dividends, deposits can be both profitable and unprofitable. Especially if the depositor wants to withdraw money early. The first thing that definitely needs to be considered is the advantages of deposits: 

1. Stable income. Deposits provide predictable income in the form of interest.

2. Protection against inflation. Keeping funds in a deposit can help preserve their purchasing power.

For many depositors, these conditions are sufficient to place deposits, even in times of war in Ukraine. 

However, different deposits have their risks; otherwise, everyone would be engaging in such investments without exception. What are we talking about: 

1. Loss of liquidity. In the case of term deposits, the money will be "frozen" for the entire term of the agreement.

2. Inflation. If the deposit interest rate is lower than the inflation rate, the depositor's real income may decrease.

Thus, deposits are a safe and relatively reliable way to store savings in Ukraine, especially if you choose large banks that guarantee their payouts (special programs).