In an exclusive interview with UNN, Olena Sosedka, co-founder of Ukraine's first fintech ecosystem Concord Fintech Solutions, told what to look for when placing deposits in a bank, how to choose a financial institution to avoid losing your savings, and shared the formula for calculating passive income.
In times of war and economic instability, deposits remain one of the most popular ways to preserve and grow savings. However, it is important to carefully assess all the risks and choose a reliable bank before making a deposit,
According to her, deposits can be attractive in times of instability for several reasons. In particular, they allow you to preserve capital and protect it from inflation.
In addition, unlike riskier investments, deposits provide a stable and guaranteed income. At the same time, Sosedka says, it is important to choose the right bank when placing a deposit to avoid losing your money.
Research the bank's reputation, history, financial performance, and reliability ratings. Pay attention to customer and expert reviews,
Also, in her opinion, before investing, you should compare interest rates on deposits in different banks and make sure that the offer of the bank you choose is competitive and in line with market conditions.
According to Sosedka, you should study the terms of the deposit in detail, including the minimum deposit amount, terms, the possibility of replenishment and early withdrawal, as well as penalties for early termination of the contract.
In her opinion, the level of service and ease of use of banking services, including online banking and mobile applications, is also important. Sosiedka also said that the amount of deposit required to generate significant passive income depends on several factors.
For example, the higher the interest rate on the deposit and the amount of the deposit, the higher the income.
Longer deposit terms usually offer higher interest rates,
According to her, it is also necessary to take into account taxes that will reduce your net income and possible fluctuations in the hryvnia exchange rate, which can affect the real value of your income in the long run.
Example of income calculation:
Suppose you place a deposit of UAH 100,000 at 10% per annum. Your income for the year will be:
\(100,000 \times 0.10 = 10,000\) hryvnias.
If you want to receive a substantial passive income, for example, 50,000 UAH per year, you will need to place a deposit of:
(50,000 div 0.10 = 500,000) hryvnias.
The neighbor reminded us that in Ukraine, income earned from deposits is taxed. The following tax scheme is currently in effect:
1) Personal income tax (PIT): The personal income tax rate is 18% on deposit income.
2. military duty: An additional military tax of 1.5% of income is charged.
Example of taxation calculation:
If your deposit income is UAH 10,000, the taxes will be as follows:
- PERSONAL INCOME TAX: \(10,000 \times 0.18 = 1,800\) hryvnias;
- Military fee: \(10,000 \times 0.015 = 150\) hryvnias.
Thus, the total tax will amount to:
\(1,800 + 150 = 1,950\) UAHYour net income on the deposit after taxes will be:
\UAH 10,000 - UAH 1,950 = UAH 8,050.
The unstable hryvnia exchange rate is another important factor to consider when making deposits. Exchange rate fluctuations can significantly affect the real value of your income, especially if you plan to use your earnings for purchases abroad or investments in foreign currency,
She added that given the high volatility of the exchange rate, it is worth considering placing part of the funds on deposit in foreign currency to protect against hryvnia devaluation.
In addition, Sosiedka advises to regularly monitor changes in the hryvnia exchange rate and adjust your strategy if necessary. According to her, it would not be superfluous to consult with financial advisors to get recommendations on the optimal allocation of funds.
Deposits can be a reliable and stable way to preserve and grow savings in times of war. However, it is important to choose a bank carefully, paying attention to its reliability, deposit terms and deposit insurance programs. Determining the amount of a deposit that provides substantial passive income depends on the interest rate, your financial goals, and taxes. Given the volatile hryvnia exchange rate, you should consider diversifying your deposits and consult financial experts to minimize risks,
Recall
In an exclusive interview, Sosiedka explained what you should pay attention to in order to protect yourself from losing money. Among other things, the expert advises to always count on the worst-case scenario when taking out a loan. In particular, you should assess your own ability to repay the loan in the event of a decrease in income or unforeseen expenses. To learn what else to look for when taking out a loan, read at.