Any motto that “money should work for itself” is familiar to all banks and their depositors. Only now the income from case to case is different for depositors - someone has earned a lot by keeping their own money in the bank, and someone has very little.

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This is due to many factors, and one of them is precisely the presence or absence of capitalization.

If it is available under the terms of the bank offer, then the benefit for the client will grow, if there is no such option, then the income will be less than with it.

It is necessary to understand in more detail what it is - capitalization, how such a mechanism works, according to what scheme such interest is paid on a deposit, and what are the disadvantages and advantages in this case.

What it is

The capitalization of the deposit account is the interest that the bank pays to the depositor on the interest already accrued under the agreement.

This means that first the deposit rates are determined, they are prescribed in the contract, and then, on top of them, there is still an accrual of capital.

Usually, the rates together with capitalized interest are called “nominal interest” on the deposit.

They are always presented in the table of rates as values ​​larger by 0.5-2%, or even more, depending on the conditions of the bank.

And all this is added to the principal amount of the deposit account. We can say that capitalization is one of the mechanisms for increasing the deposit rate.

Every bank wants to have such clients who have large amounts of money in their accounts, which the bank can use for its own purposes. And for this, such customers still need to be found.

Banks attract free capital from customers precisely through various tempting offers.

And one of these proposals is precisely the capitalization of interest - income on the interest exposed on the deposit. The interest itself can be simple and compound (discount).

There are 5 types of capitalization that banks practice in their activities when they offer deposits to depositors:

• one-time;
• everyday;
• monthly;
• quarterly;
• annual.

How these mechanisms differ from each other and what is their meaning should be considered in a special table.

Features of different types of capitalization:

Note! When drawing up the terms of the deposit agreement, the bank employee should always clarify what exactly the capitalization charges will be made on - only on the deposit interest, or on the interest and the deposit amount itself too.

Because some banks under the "body" of the deposit may mean different things. For some, this is only the deposit interest, while others admit that it can be the deposit amount itself and the interest rates already accrued on it.

How it works

The question arises: “Why does the bank pay additional interest to the depositor?”. The answer is very simple: “The bank pays a percentage of the capital on the deposit for the fact that the client has entrusted his property for safekeeping to the bank, which, in turn, can dispose of the depositor’s amounts within banking activities for the time the money is placed in the account.”

Thus, financial institutions put clients' money into circulation until the deadline for placing finances on the account comes and it's time to give back to the client's account his money. For the fact that the bank used the property of the client, he pays the latter a percentage of the premium.

Calculation example

For calculations, a special formula is useful, the so-called "compound interest", according to which, usually, bank employees always determine the income from the capitalization of a particular deposit:

Under the annual interest on the deposit program, now it is necessary to understand the additional interest that performs the function of capitalization.

Now, according to the formula, we will calculate according to the following conditions of the problem:

1. The depositor is ready to deposit 200,000 Russian rubles to the deposit account initially.
2. The term of placement is 1 year (365 days).
3. The bank has set the deposit rate at 10%.
4. As a result, the investor will receive an income of 20,000 rubles at the end of the year.

Now, using the formula, we calculate the monthly increase in profitability from capitalization interest accrual: 200,000 rubles * 31 months: 365 days * 0.1 capitalization interest = 1699 rubles.

If you need to visually see the amount of capitalized interest for each month of the year, then below is a table for this, broken down by months.

Monthly capitalization amounts that are set in case of settlements under the terms of the task, where the initial deposit amount was 200,000 rubles:

All amounts of capitalized interest indicated in the table will be additionally credited with the principal amount of interest under the deposit agreement, which, according to the terms of the task, is 20,000 rubles.

The longer the term of the deposit, the more the income will grow. So, when extending the contract for another year, the amount of income will double at the end of the 2nd year.

The procedure for paying capitalization interest on the deposit account

Banks can charge such interest in a different order, but for one contract, one method of payment is always chosen.

In total, there are three main methods of how income interest is paid to a client:

1. Once a year.
2. Once a quarter.
3. Once a month.

Send the amount of income to certain accounts, which can be:

• client current account of another bank;
• client current account of the same bank where the deposit is opened;
• deposit account opened in the name of the client, with interest added to the deposit amount;
• client card account of another bank;
• client card account of the same bank (the card can be linked to a deposit account).

Note! The terms of the agreement must necessarily stipulate that neither the rate nor the procedure for paying interest should change during the entire term of the agreement.

That is, what rate the bank initially determined and prescribed in the contract, this should be the whole year (even if it is floating, then the payment schedule with a gradation of rates is simply indicated). Also, the payment procedure should be the same as it was determined by the parties in the contract.

Pros and cons

The advantages of the capital accumulation mechanism through additional interest are the following factors:

1. Increasing the client's profitability due to additional profit - percentage of capitalization.
2. Obtaining passive income - the client does not make much effort to earn that kind of money. He is paid for the temporary lease of his funds.
3. The annual interest increases significantly with long-term deposits, especially when compared with the original rate.
4. The client has the opportunity to choose whether to connect capitalization or not.
5. For those clients who do not need to periodically withdraw money from the deposit, it is enough to accumulate in order to receive their funds at the end of the term with great profit.

But the disadvantages include some other nuances that you should definitely pay attention to even before signing an agreement with a bank on opening a deposit:

1. Very often, for deposits with capitalization, the option of debit transactions is not provided.
2. Preferential termination of the contract ahead of time is rare. Most likely, the early termination of the agreement will attract a recalculation of interest, and the depositor will receive his money back without income.
3. The rates for deposits with capitalization are reduced by 0.5, 1, 1.5 or 2 orders of magnitude, so it is not always profitable to make a deposit with capitalization, if without it the interest is still the same. For example, the rate without additional capital was - 9.5%, with capitalization - 8.8%, plus - additional percentage of capital - 0.3%. It turns out that without capitalization it is more profitable to make a deposit because the difference in favor of a term deposit without this “bonus” was 0.4%.
4. If the deposit is made for 2 years or more, then there is a big risk of revoking the license from the bank in an unstable situation in the country. And this threatens with bureaucratic red tape due to obtaining insurance. Thankfully it even exists.
5. Sometimes the bank can cheat, and the interest on capital will be charged in a currency that differs from the currency of the funds placed on the account by the depositor. If this is discovered before the signing of the contract, then it is better to refuse the transaction altogether.
6. For those clients who expect to withdraw profits from time to time, and not accumulate for years, the long-term deposit with withdrawal restrictions simply does not suit.

The big disadvantage of such deposits is the inability for the client to partially withdraw some amounts for himself. The bank needs the client's funds for temporary use, so it does not allow them to withdraw the entire deposit period, or part of the period.

If, suddenly, some kind of incident happens or for some reason the depositor urgently needs his money, then he will have to close the deposit ahead of schedule.

But often, with the early closure of such deposits, where debit transactions were initially denied, interest is lost.

The depositor will simply return his own funds, but at the same time, he will lose almost all the interest accrued earlier during the placement period.

Therefore, experts recommend that all prospective depositors weigh all the pros and cons immediately before agreeing to the terms of the bank.

Therefore, we suggest taking these tips into account and applying them in your practice if you are a future contributor:

1. Calculate your possibilities as accurately as possible so that you do not have to withdraw amounts from the long-term deposit account during its validity period.
2. If you are not sure about your own financial capabilities in the near future, then it is better to make a deposit with capitalization for a short period of time - no longer than 1 year.
3. In any case, you will have to compare bank products. Otherwise, there is a risk of losing your profit when some worthy product or promotion "passes" by you.
4. Be sure to pay attention to the reliability of the financial institution and the rating assigned to it by professional analysts.
5. Use not only online calculators, which are posted on the bank's official portal, but also free phone calls or chat on the company's website for detailed consultations and clarifications on profitability calculations.

Summing up everything that was said earlier, it is worth noting that if there is capitalization under the terms of the deposit, then this may mean that the bank plans to use your funds to increase its working capital.

Throughout the entire period of the open deposit, the depositor will be shown in his personal account on the bank's website that the minimum balance is untouched.

But in reality, the depositor does not know whether the bank uses this amount from his funds - or not. According to experts and legislators, capitalization is an excellent solution for a bank to pay, as it were, a "rent" for using the depositor's money.

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What is the capitalization of the contribution and 3 disadvantages of capitalization. What can the conditions of a bank deposit depend on? What are the terms for calculating interest on a deposit? How to choose a profitable bank deposit?

A deposit is one of the most common ways to store money.

In order for the amount not just to lie at home, under the mattress, but, it is usually put into a financial institution at a certain percentage.

Thus, capital is partially insured against depreciation. Or, at least, it is stored in a safe place, and is “in work” all the time.

There are different deposits, and each bank offers its own conditions. Usually, the choice of conditions depends on the term and purpose of such investments.

One of the not unimportant characteristics of a bank deposit is the periods in which the client can make a profit, this is what defines the concept, what is capitalization of a deposit.

Capitalization of the deposit - what is it?

What is the capitalization of a contribution in simple terms?

Capitalization of a deposit is a type of calculation and accrual for the amount that was deposited into the account.

More precisely - the accrual of income not at the end of the selected period, from the initial amount, but throughout the entire period at certain stages.

For example, quarterly, when the dividend is accumulated in stages, four times a year. Each time it is calculated not from the initial amount, but from the one to which a certain share has already been accrued.

To make it more clear, you can parse this with an example:

Let's take an initial capital of 1,000,000 rubles, which was deposited in a bank, at 12% per year.
At the same time, we will choose the rate of monthly crediting on the deposit. Every month, the amount in the account will increase by 1%.
In the first month, 10,000 rubles will “fall” into the account. As a result, we get 1,010,000.
Next month, 1% will also be credited, but it will no longer be 10,000, but 10,100.
And so on every month.

The general formula by which the transfers are made looks like this:

For example, the same 100,000 rubles, and if we take interest rates of 10%, 15% or 20%.

In half the cases, choosing the type of investment with the condition of monthly crediting to the account, but not with such a high percentage, you can get more than in the case of the annual accrual, but with a higher bank rate.

"Pros and cons" of capitalization of deposits

The advantages of such a proposal would seem to be obvious. At a minimum, we saw this in the example above.

However, as in many other financial situations, there are some drawbacks.

Among the minuses, the following points can be distinguished:

Even if credits occur frequently, they can only be withdrawn within certain periods specified in the contract.

But this is a dubious minus, since it confuses not everyone.

1. In case of premature withdrawal of investments in full (termination of the contract for a certain duration), the investor receives a completely different dividend, which depends on the current accounts in the selected institution.

Compound interest is not always more profitable than the standard method of calculating the income rate, since such a rate is usually lower, so it is not always worth choosing a deposit with a complex calculation.

It is better to analyze all offers and choose the most profitable one, which will allow you to get the most.

Where else can capitalization and its types occur?

1. On a loan (credit).

Of course, in the case of bank investments, compound interest works to the advantage of the depositor, if he correctly calculated and understood the conditions.

But sometimes such a factor as capitalization is not positive. For example, in the case of lending.

Often there is such a situation when a person takes not such a huge amount, but pays it for a very long time. During this period, it would be possible to repay the debt in full a long time ago, however, sometimes only half is repaid.

This is where compound interest comes in.

In this situation, the following picture is obtained: every month the initial amount grows by a certain percentage. What does it mean - the overpayment is calculated from the amount with the interest already accrued.

These are far from the most favorable lending conditions, since in this case the overpayment can be reduced only by paying off the debt as soon as possible.

2. On the market (market).

This process can be traced almost everywhere in the economy, for example, in the market.

If we are talking about market capitalization, then we can consider the calculation of the monetary growth of a certain sector of the economy, industry, or even a single company.

If you choose the activity of a particular enterprise, then, with the help of its accounting report, you can see an increase or decrease in the working capital of this company.

In order to get a true picture, it is necessary to take into account only the capital owned by the enterprise itself, excluding all borrowed funds from the calculations.

Market capitalization has nothing to do with deposits, but it reflects the general characteristics of this process.

How to choose the optimal conditions for bank investments?

What are the periods for crediting dividends on a deposit?

All the intervals through which the bank credits income are selected and offered by the bank itself. The depositor accepts or rejects the conditions offered by the bank.

There are such periods of accrual of income at the rate:

1. One-time credit- the most unprofitable capitalization, since, in fact, there are no internal accruals, only at the end of the deposit period.

Enrollment annually- brings insignificant income, if we are talking about a short period of time (2-3 years).

If we consider a longer period (for example, from 5 years), it can turn out to be a very profitable solution.

Quarterly capitalization– this option is more profitable and convenient for those who are interested in a short-term deposit.

The reason is that a certain percentage, according to the rate, will drip every 3 months.

2. Monthly capitalization- the most suitable for a short deposit period, as the interest drops every month.
3. Daily is a very rare occurrence, since this type of deposit will be very profitable for the depositor, but very unprofitable for the bank.

What are the main points to pay attention to?

After analyzing all the offers and benefits, have you already decided that the type of deposit with compound interest growth is right for you?

Still, you need to take into account additional nuances that may affect how profitable this deposit will be.

List of nuances that should always be discussed with a bank employee:

• What will be the interest rate if capitalization is not taken into account?
• Terms and periods of accruals on the amount of investment.
• How will interim interest be calculated?

You need to understand that interim dividends can be credited to a separate account, which means that the initial deposit amount will not change during the selected period.

And at the end of the period, only the total interest on the deposit from the original amount is charged.

Or, as in the calculations above, intermediate charges can be added to the initial capital and, as a result, a further percentage will be calculated from the total amount.

Conclusion on what is the capitalization of the contribution and the short advantage

From the foregoing, we can conclude that such a phenomenon as capitalization still has more pluses than minuses.

This type of investment is designed for those people who are interested in the stability of income, as well as the desire to receive the maximum amount in the shortest period.

If we are talking about raising money for the purpose of buying real estate or other high-cost purposes, then the deposit, which takes into account investment capitalization is exactly what is needed.

However, there are areas in which it is not only a positive moment. One of them - . Interest capitalization in lending is also growing rapidly, as well as interest in a long-term deposit.

Just about the complex. What is the capitalization of a deposit?

How it works? Details in the video:

However, in the case when a deposit with capitalization is decisively chosen, you need to select the conditions very carefully, since it is very difficult to find a bank that offers a high interest rate under fair conditions ...

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We optimize deposits using capitalization

Capitalization of deposits - what, where, when?

In a period of economic instability, the issue of saving money is especially acute. In practical economics, there are enough methods to ensure the safety of savings. One of the ways is to contribute to financial institutions -, fund or. At the same time, depositors do not always fully understand the procedure for calculating interest on a deposit. Although, I think that all readers have heard about such a thing as the capitalization of deposits.

As a rule, an ordinary person expects that he can get all the necessary information from a bank employee. But employees of credit / investment organizations are more interested in profit, so the information may not be accurate enough to select the most profitable offer. In this article, we will talk about capitalization, but not only on bank deposits, the material will also be relevant for other financial instruments (investments in MFIs, CCPs, HYIPs, etc. fixed income instruments).

What is the capitalization of a deposit

I have been blogging for over 6 years now. During this time, I regularly publish reports on the results of my investments. Now the public investment portfolio is more than 1,000,000 rubles.

Especially for readers, I developed the Lazy Investor Course, in which I showed you step by step how to put your personal finances in order and effectively invest your savings in dozens of assets. I recommend that every reader go through at least the first week of training (it's free).

In simple terms, capitalization is when the interest accrued over a certain period is added to the body of the investment.

In the line of banking products, two types can be distinguished: capitalization of interest on a deposit and capitalization of a deposit. The main difference is that when capitalizing a deposit, interest is charged on the amount of the initial deposit. Interest on the deposit is accrued either at the end of the deposit period, or immediately paid to the depositor.

When capitalizing interest on a deposit, interest income is also accrued on the amount of the deposit, but is immediately added to the body of the deposit. If we talk about bank deposits, then capitalization occurs monthly. Accordingly, the deposit increases, and the subsequent accrual of interest is made each time for an increasing amount. That. income increases due to previously accrued interest, providing the deposit with a higher efficiency of investment. Such contributions are also called.

Types of deposits with interest capitalization

Deposits with interest capitalization differ in terms. Here are the most common examples:

• capitalization at the end of the deposit term;

It is an ordinary deposit with simple interest. It is beneficial only in case of prolongation of the contract (if we talk about a bank deposit), when both the deposit itself and the interest accrued on it remain on the deposit;

• annual capitalization of interest on the deposit;

• quarterly interest capitalization;

A deposit with a similar accrual scheme has an average yield in the line of proposed schemes.

• deposits with monthly interest capitalization;

The most popular scheme among bank deposits.

• weekly and daily interest capitalization;

Most often, this scheme is used.

It is necessary to distinguish between the frequency of accrual of interest on the deposit and the frequency of their capitalization. For example, an investment instrument may accrue interest daily, but capitalize it on a monthly basis.

Formula for capitalization of interest on a deposit

To evaluate the effectiveness of a deposit with interest capitalization, let's compare its yield with the yield of a regular deposit. To do this, consider an annual deposit of 10,000 rubles with a rate of 10% per annum.

The yield under the usual accrual scheme, that is, when accruing simple interest, will be:

0.1 x 10,000 = 1,000 rubles.

Consider the return on a deposit with similar input conditions, but with monthly capitalization:

• in the first month, the amount of accrued interest will be 10,000 x 31 / 365 x 0.1 = 84.93 rubles, and the deposit amount, respectively, will be 10,084.93 rubles;
• the interest on the deposit for the second month will be 10,084.93 x 30 / 365 x 0.1 = 82.89 rubles, and the deposit amount becomes equal to 10,167.82 rubles;
• the third month is calculated similarly. The interest on the deposit will be 10,167.82 x 31 / 365 x 0.1 = 86.36, and the deposit amount will increase to 10,254.18 rubles.

For other periods, accruals are made according to the same formula. The total amount for the year is 11,047.13 rubles. Thus, the yield on this deposit amounted to 1,047.13 rubles, which exceeds the yield on a regular deposit by 47.13 rubles. It is obvious that the choice of a longer term of the deposit or its amount will also give a greater increase in profitability.

In addition, the greater the number of periods for calculating interest on deposits with capitalization, the more profitable the deposit. That is, for example, a deposit with a monthly capitalization has a higher yield than a deposit with a quarterly capitalization.

Is capitalization profitable?

Having considered deposits with simple and compound interest, it would seem that we can conclude that deposits with interest capitalization are preferable for depositors. However, bank deposits with simple interest are statistically more popular.

A large number of bank customers prefer to receive interest from deposits as a regular income, rather than accumulate them for a long time. Also, often the conditions of deposits with capitalization do not allow partial withdrawal of funds during the placement period. For investors, the ability to manage their money without losing interest in the event of unforeseen difficulties is decisive when choosing. In addition, most banks offer deposits with capitalization at a lower interest rate than deposits with simple interest. The difference can be 0.5-1% - this is the percentage that capitalization gives in addition to the contribution.

When choosing a deposit offer, one must proceed from the current financial situation of the depositor. You should clearly know whether money may be required during the period of the deposit. If not, you can choose a deposit that has the maximum effective rate, provided, among other things, by interest capitalization. In the absence of such confidence, one should choose from deposits with the possibility of partial withdrawal. By the way, I usually find out the most advantageous current offers of banks on banki.ru, I can also recommend the blogbankir.ru blog, where you can find the most advantageous offers.

Almost all depositors know what a deposit rate is, and many also understand how interest is paid to bank customers. However, not everyone knows what capitalization of a deposit is and how to work with it - it is this topic that is covered in this article.

Capitalization of interest on the deposit account is the addition of the due interest to the principal amount of the deposit. Thus, the depositor not only increases the size of his capital in the deposit account with the bank, but also increases the "return" of the deposit: the larger the deposit, the more in absolute numbers is paid to the client at an interest rate.

The easiest way to show this is with an example:

• The conditional employee Yevgeny deposited 300 thousand rubles into the account, for which he is entitled to 10% per annum every year;
• If Eugene chose, for example, annual capitalization, the due 10% per annum - 30 thousand rubles - will be included in the main contribution. In this case, the deposit will increase to 330 thousand rubles, and the interest payment next year will already be 33 thousand rubles;
• If Eugene wished to open an account without capitalization, then interest in the amount of 30 thousand rubles would simply be transferred to his account. The amount of the deposit will remain the same as before, and Eugene will be able to spend the 30 thousand rubles received from the interest at his own discretion.

How often can capitalization be carried out?

The frequency of capitalization depends entirely on the agreement signed between the client and the bank employee.

At the moment, the most popular among investors are weekly, monthly and quarterly (once every three months) capitalization.

In addition, at the legislative level there are no restrictions on the frequency of capital increases: the form of the contract and the procedure for relationships are almost completely regulated by the Civil Code of the Russian Federation, which means that everything depends on the agreements between the parties. So, for example, it is quite possible to capitalize every six months, once a year, and even on a daily basis.

How to calculate interest on capitalization?

Bank employees use special formulas for calculation, and only in rare cases are they complex enough that an ordinary person could not use them for himself. To calculate the final amount of the deposit after interest is calculated, the following formula will be needed:

T = S*(1+N/100) to a degree depending on the periodicity of capitalization, where:

• T - the total amount of the deposit;
• S - initial amount;
• N - bank rate.

Parsing with an example:

1. Eugene put 300 thousand rubles on a deposit account at 12% per annum;
2. 1+12/100 = 1.12;
3. This number must be raised to a power depending on the period of capitalization. Suppose interest is calculated every six months, then 1.12 must be raised to the power of 0.5, resulting in the number 1.058;
4. We multiply 300000 by 1.058 = 317400. This is the amount that the investor will get if he chooses capitalization every six months.

Reference: keep in mind that the exact amount will be slightly larger: in our example, the number after raising to a power was rounded down.

Accordingly, the investor's profit for two quarters will be 317,400 - 300,000 = 17,400 rubles. You can easily see that there is nothing complicated in using the formulas, however, the depositor may accidentally make a mistake in the calculation process, so it is recommended to use the online services of banks to calculate the total amount of the deposit.

Which deposit is the most profitable - with or without capitalization?

The answer to this question depends on what goals the investor pursues. If the investor does not have the goal of investing money for the long term - for example, he only needs to set aside money to buy something in the near future - the capitalization option may simply not be needed.

The increase will hardly be noticeable, but the depositor will not be able to withdraw money just like that: when opening a deposit with interest accrued to the account, as a rule, you can withdraw money only after the end of the period established by the agreement.

However, if the depositor needs an account for a period of more than a year (especially for a period of more than five years), the benefit of accrual becomes obvious. Although the interest rate remains unchanged, the profit received from it regularly will increase, because. the size of the deposit is replenished with the accumulated interest with a certain frequency.

For example, a depositor who did not use the interest accrual will receive back his 300 thousand rubles ten years later, and he also received 30 thousand rubles annually at a rate of 10% per annum - a total of 600 thousand rubles, of which profit is 300 thousand. In turn, the investor, who capitalized his contribution every year, will receive 778 thousand rubles as a result, the profit will be 478 thousand rubles.

Thus, in the case of long-term investment, capitalizing interest is the only correct decision from a financial point of view, while in the short-term it is less clear and depends on the subjective preferences of the investor.

Pros and cons of interest capitalization for the investor

Of course, such an advantageous solution also provides for a number of inconveniences, otherwise banks simply would not offer other types of deposits.

• With long-term investment of funds, periodic capitalization of funds significantly increases the final profit of the deposit. Please note: the more often capitalization occurs, the more profit the investor will receive;
• For those who plan to raise a large sum - as security for a pension or to buy something - an interest-bearing deposit will allow you to do without unnecessary expenses, because. withdrawing money is quite difficult for users of this type of deposit. In this case, the account becomes partly savings.

• The amount received from interest on a monthly basis can sometimes greatly help the investor with his financial situation. However, a capitalized deposit implies that all this interest is credited back to the account - this means that the depositor is giving up short-term profits for greater long-term profits;
• If it is extremely important for a citizen to be able to withdraw money from the account without restrictions or the availability of early termination of the contract unilaterally is necessary, then a deposit with capitalization is not unequivocally suitable, because. under the terms of the agreement, both the term and the amount of withdrawal of funds are limited.

How to choose a deposit with interest capitalization?

When choosing a deposit, it is necessary to pay attention not only to the standard conditions for placing money - the interest rate, the minimum opening period, the minimum amount of placement, and so on - but also to the conditions associated with the capitalization itself.

Firstly, not all banking organizations offer weekly interest accrual, and even more so daily. Most banks offer monthly accruals; in this case, weekly or daily capitalization becomes a significant advantage, because. such periodicity will give the greatest growth of the contribution.

Secondly, not all organizations provide for the extension of the contract. For those who invest in the long term, this can be a disadvantage: if it is necessary to keep money in the account for some time, the depositor will simply be refused, citing the terms of the contract.

Thirdly, the parameter of withdrawal and replenishment of funds is extremely important. For those who wish to actively maintain their deposit account, this parameter becomes the key one at all, because. it depends on the expediency of keeping an account.

Thus, having decided on his own goals and desires, the investor can pay attention to those parameters that play an extremely important role for him.

Popular deposits with capitalization from other banks.

What are the options in the banking market?

The most popular banking organization among Russians - both in terms of lending and deposit accounts - is still Sberbank. In this regard, it is his proposals that we will consider.

In total, at the moment there are three deposit programs for different categories of the population:

Contribution "Manage". Ideal for middle-class citizens (in terms of income) who do not intend to invest money for the long term. The minimum opening period is 3 months, the maximum is 3 years. The highest interest rate on the deposit cannot exceed 3.8% per annum, there is an opportunity to partially withdraw money, replenish the deposit, capitalize interest and close the account ahead of schedule. The minimum amount to open a deposit is 30 thousand rubles.

Deposit "Replenish". The term for opening a deposit is the same as in the previous offer of Sberbank, however, the minimum amount starts from 1000 rubles. The interest rate may rise to 4.1% per annum, while partial withdrawal of funds is not possible, early closure and capitalization of interest is possible. The offer is suitable for citizens who want to open an account for a long time.

Contribution "Save". Deposit term - from one month to three years. The minimum replenishment amount is 1000 rubles. The maximum possible rate is 4.45% per annum, while the depositor cannot replenish and partially withdraw money. Capitalization is also available to the investor.

By reviewing the above list, you can understand that the conditions of the programs are guided by different needs of clients. For this reason, the first and foremost business of the contributor should be to determine their own desires, because. the final benefit from opening an account depends on this.

The nuances of interest capitalization in the case of lending

If we compare a deposit and a loan, when issuing a loan with capitalization, the borrower receives, on the contrary, less favorable conditions. The reason is that the interest accrued on the loan is monthly added to the body of the loan.

Consequently, interest payments increase. As a result, a situation may arise when the borrower borrowed a very small amount, but for a long time - and as a result, the overpayment may amount to 50% or more of the originally issued funds.

There are two main nuances. Firstly, the condition for adding interest to the "body of the loan" must be spelled out in the loan agreement without fail. The absence of this clause makes the whole process illegitimate, and the deceived borrower will have every right to go to court with a complaint against the bank. Therefore, before signing the document, the borrower needs to carefully study it, in particular the section “Subject of the agreement”.

Secondly, if the lender is an organization using a simplified taxation system, interest payments must be indicated as expenses, and personal income tax must be withheld from each amount paid to the creditor. If the borrower is an individual, all tax liabilities are assumed by the creditor organization.

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The simple idea that money should work, and not just lie dead at home under a pillow or mattress, and bring income to its owner, visits many bright minds. The result of these reflections is usually the decision to open a deposit. Then the ordeal begins in search of a suitable credit institution.

To date, financial systems know many objects for investment - real estate, business, precious metals, securities. Naturally, investments are associated with risks, but by learning how to correctly evaluate them, one can achieve quite real success in this field. Consider what capitalization of interest on a deposit account is.

Interest capitalization - what is it?

Capitalization in this case is a type of calculation and accrual for the amount that is on the deposit. To be precise, these are accruals made not at the end of the term, from the amount that was originally, but throughout the entire period of the deposit on certain conditions. For example, this might happen once every quarter during the year. With each accrual, the interest is not calculated from the initial amount, but from the one that is currently in the account. The amount will grow rapidly (or not so much, depending on your choice) over time. Is a deposit with monthly capitalization profitable?

Deposits with monthly interest

In most cases, if you choose an investment with a monthly credit to the account, but with a lower percentage, you can win more financially than in the case of an accrual once a year, but at higher bank rates. Keeping money on deposit is one of the most popular ways to increase your deposit. In this case, the money turns out to be partially insured against inflation, and for security reasons this option is certainly reliable.

The type and number of deposits are diverse, as is the number of banks offering these services. You need to choose the one that suits you in terms of terms, purpose and interest rate. One of the most important characteristics of bank deposits is the terms in which the client can receive income. Consider the positive and negative sides of the capitalization of interest on the deposit account.

Pros and cons

The advantages of such an allocation of funds, it would seem, are quite obvious. The above example proves this. However, like many other financial instruments, this option is not without drawbacks.

The disadvantages in this case include the fact that credits are withdrawn only in a certain period specified in the contract, otherwise interest on the deposit is lost. But this moment confuses not every investor (after all, everyone has their own circumstances). In case of early withdrawal of the invested amounts in full, the depositor receives a completely different income.

Compound interest is not always more profitable than the standard method of calculating the deposit rate, since this rate is usually not very high, so it is not always worth choosing a deposit with complex calculations. It is better, after analyzing all the proposed options, to opt for the most profitable in terms of profitability. What is the capitalization of interest on a deposit account?

Kinds

Of course, in the case of bank deposits, compound interest works for the depositor, with the correct calculation and understanding of the conditions, of course. But sometimes such a factor as capitalization does not work in a completely positive way. For example, in the case of loans. Everywhere we meet with such a situation when a person takes not an astronomical amount at all, but pays it for a rather long period of time. During the period, it would be possible to pay off the entire debt a long time ago, however, sometimes it turns out that only part of the loan has been paid. This is where compound interest comes in. In these situations, the calculation is as follows: every month the initial amount grows in accordance with its own percentage, determined by the agreement.

How is interest capitalized on the account?

This means that the calculation of the overpayment is set from the amount with interest already accrued. It can be understood that this is far from the most profitable lending option, since it is initially assumed that it is possible to overpay less by paying off the debt faster. It’s just that no one thinks about capitalization at the time of choosing a loan, and the unfavorable conditions are not always obvious.

There is also such a type of capitalization as market capitalization. In this case, monetary growth is analyzed as an indicator of the effectiveness of a particular sector of the economy, a field of activity or a single enterprise. If, for example, you choose a certain organization, then, having studied its accounting report, you can trace the movement of working capital of this company in one direction or another. In order to get a complete picture, it is necessary to take into account only the capital that belongs to the organization itself, excluding all borrowed funds from the calculations. Market capitalization does not correlate with deposits in any way, it rather allows you to see the general trends in the development of this process.

What to look for when choosing?

First of all, you need to study the information about the bank itself, and, despite all the advantages offered, try to objectively evaluate the pros and cons. Regardless of the exorbitance of the income offered, the safety of money is the primary characteristic when choosing. For example, such an obvious fact, the more unrealistic and more profitable for the depositor the interest on deposits, the more the bank needs your funds, the less it has its own funds. As a rule, this is a direct path to bankruptcy.

How to choose the right deposit with replenishment and capitalization?

Of course, small deposits are almost always covered by insurance. And yet it is better to deal only with trusted credit institutions. The choice must be made according to several criteria: customer reviews, the life of the bank, reputation. The second main point (when choosing the capitalization of the deposit) is how quickly this money may be needed and whether the client will need it in the near future. If the answer to this question is yes, then it is obvious that short-term investments should be considered.

You should not stop at the first offer that comes across, since in our country there are, and quite successfully, many large banks and other financial institutions that offer profitable, competitive banking products. It is worth comparing not only different institutions, but also different types of deposits, as many of them have some kind of unique conditions for clients.

What is the capitalization of interest on account 08? Let's figure it out.

In accounting, the interest accrued on the loan must be attributed to the debit of account 08. But only if the loan is taken in order to create an investment asset, the interest is included in its initial cost.

Deposit periods

All periods in which the bank calculates interest are selected and offered by the bank itself. The depositor agrees with them or rejects the conditions offered to him. There are such enrollment options:

Capitalization in Sberbank

Capitalization of interest on a deposit account with Sberbank is popular. There you can choose the most suitable deposit from the product line, for example, "Top up", Save, "Manage". Capitalization is available for each such deposit. That is, the accrued interest will be added to the total amount, and in future periods the interest will be more profitable.

Conclusion

From all of the above, we can conclude that such a phenomenon as the capitalization of interest on a deposit account still has more positive than negative. This type of deposits is designed for people who are interested in the stability of income, as well as those who have a desire to receive the maximum possible profit in the shortest possible time.