Profitability of bank deposits in investing

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Many popular financial blogs still promote bank deposits. One bank offers deposits with an interest rate of 0.5% higher than others. Many readers comment on such news with excitement and it seems that a lot of money will flow into the banks. I am not saying that deposits are bad, but knowledge about them and inflation is still negligible. If you asked people on the street what a bank deposit is, most of them would answer more or less similarly.I deposit a certain amount of money into the bank and after a set period of time I can withdraw it, increased by interest. I earn money, so I invest. When they read a "hit" like the one quoted at the beginning, they are delighted because they know something that others do not and thanks to this they can make a great deal.

A deposit is a loan given to a bank
Do you also "earn" like this, Reader? Do you "invest" e.g. PLN 50,000 in a three-month deposit to "collect" the entire PLN 437.50 gross after a year? Are you happy that it is as much as 3.5%, and not just 3%, like in dominican republic whatsapp database other banks? Have you ever wondered what the bank does with your money? It lends it to your neighbor, for example. At 10% interest. Forgive me for being direct, but you are making a bad deal. Because in reality, your deposit is nothing more than a loan granted to a bank. To the same bank that lends the same money to its customers, almost three times more expensive. It is the bank that earns the most, you can accept it or not and invest it somewhere else. By the way, I invite you to read the article in which I suggest how to set up an e-account in mBank .

Profitability and real inflation
Whether it is worth keeping money in a bank deposit depends on a basic factor. The real inflation rate. Not the one provided by the Central Statistical Office, which belongs to the government, where statistical data can be manipulated. In reality, prices are rising much faster and everyone who makes any purchases notices this phenomenon. Usually by a dozen or so percent per year. Therefore, it is no secret that the current interest rates on deposits do not protect against inflation.

A deposit is just a form of storage
banknotes in a money box
pixabay.com

Of course, a deposit has its advantages. Your money is safe and the interest is higher than on a personal account or even a savings account. Therefore, keeping money in a bank should be treated as using a "safe storage service". But believe me, this way you do not "collect" anything, you do not invest, you do not earn anything. You simply store money that is not exposed to theft or burning in a house fire. The most important advantage of a deposit is the fact that you will get your money back 99%. Even in the event of a bank's bankruptcy up to the equivalent of EUR 100,000, the funds in each bank are guaranteed by the BFG.