Deposits and Shares are both investment tools that can be used to achieve financial plans, but Deposits and Shares certainly have very different characteristics, both in terms of risk, liquidity, and investment returns. To get the latest information about stock investments, you can look for it in the stock advisor newsletter.
Before starting to discuss the comparison of investment yields of bank deposits and bank shares, let us consider the following understanding of each.
Deposits are savings products in banks where deposits and withdrawals can only be made at a certain time, in contrast to savings that can be withdrawn at any time. Usually, deposits are deposited until a certain period can only be taken or withdrawn. Of course, deposits provide greater interest than savings accounts.
By saving deposits, then the same as lending to banks where the bank will rotate the money, and later the bank will pay in the form of interest the amount has been determined by the bank. While shares are securities that show the ownership portion of a company. If you buy shares, you are buying a portion of ownership in the company. And is entitled to company profits in the form of dividends, if the company records profits.
Which is Better, Deposits or Shares?
Deposits are a different bank facility from savings or debit that can be used by many people. However, certainly, not everyone knows and understands well what deposits are, including their advantages and disadvantages. Therefore, understand well the advantages and disadvantages of placing funds on deposit to support financial management.
Then, what is a deposit? Deposits are savings products in banks where deposits and withdrawals can only be done within a certain time. Unlike savings that you can freely withdraw at any time and at will withdraw their nominal value.
Deposits themselves have several types, there are time deposits and then there are deposits on-call or deposits that only have a short term or certificate of deposit that has a term of one year or less.
From each type, deposits are only distinguished by the time period and facilities for taking and depositing them.