Is it worth it now to get a loan and invest in deposits?

Is it worth it now to get a loan and invest in deposits?

The Belarusian market naturally responded to processes in the global economy.

Heated by the coronavirus pandemic, the financial sector is already responding to changes in all areas. For example, banks updated interest rates on some loans, and housing prices on the secondary market of Grodno dipped somewhat compared to the 4th quarter of last year. Together with Pavel Borisenko, the senior lecturer of the Department of Finance and Accounting, Faculty of Economics and Management, Grodno State University named after Yanka Kupala, we are considering how to properly manage your capital.

Will the “airbag” work?

Deposits and similar investments (the same bonds) are usually not the main source of income. Their task is to preserve capital and curb inflation. However, now in the short term, a bank deposit in any currency cannot become a “safety cushion”.

4ec63a6617353c0bc2a41952b7dfce40.jpeg

- Risks are primarily associated with foreign economic characteristics and the prospect of a global recession, Pavel explains Pavel. On the one hand, this creates opportunities for substantial earnings on very risky investments, on the other hand, it is likely that the deposit will be completely lost.

At such moments, short-term deposits should be made only with an unhindered opportunity to get your money back. If your chosen deposit does not provide such an option, it is better to refrain from deposits, regardless of how high their interest rate is.

If you are determined to open a deposit account, then you should do it in foreign currency.

- The interest rate on revocable deposits in foreign currency does not exceed 1%, on irrevocable deposits at the moment it is from 1.5% to 2.3% (subject to the placement of funds for a longer period - up to 5 years). If the goal is to maintain available cash, then this option may be appropriate. When making deposits, the choice should be made in favor of the largest, stably functioning banks, says Pavel Borisenko.

Is it worth taking a loan?

Almost the opposite of the deposit operation is a loan. Almost everything in the modern world can be bought on credit, starting from real estate and ending with small household appliances. However, now is not the most favorable time to buy something in this way.

1567081848_2207114555d67c578ec6006.68835527.jpg

- At the moment, credit purchases are quite risky, because for certain types of consumer loans, the percentage is directly related to the refinancing rate of the National Bank of the Republic of Belarus. Acquiring household appliances on credit is definitely not the best way to use money in the current period, Pavel argues his position.

But buying a home can be a profitable investment. True, only on one condition: if you have a stable source of income that will not be affected by the recession, because most loans for the purchase of housing require the need for guarantors and collateral. The current interest rates on these loans range from 11.75% for soft loans to 14.1% for loans in Belarusian rubles.

Many large banks (Belarusbank, Technobank, BelVEB and others) provide an opportunity to apply for a loan online. In some banks, the maximum loan amount that you can count on is 5 thousand rubles (depending on your creditworthiness). Such loans are issued rather quickly: from three minutes to several hours. For this, an income statement is not necessary, and you can often choose the date of monthly payment yourself. The loan term varies from bank to bank, on average - from two to five years.