Updated Wednesday, September 1, 2021 – 12:00
Inflation causes savings to lose purchasing power over the years. To make this money profitable, according to each personal case, you can choose a deposit or an interesting investment product.
If it is the first time that you invest, it is advisable to choose a simple product.
When you have some savings in an account that does not pay, you lose purchasing power due to the effect of inflation. Therefore, depending on what the plans are with that money in the future, it is possible choosesome deposit in which to put that money or some investment product to make those savings profitable. The experts of the financial comparator HelpMyCash.com explain the best option, taking care of each personal case.
If the option of making the money profitable in a simple way is chosen, there are two paths that can be followed: hiring a deposit or investing. Of course, if it is the first time investing and there is no previous experience, it is best to look for a simple investment product, such as mutual funds, index investment funds, stocks, etc.
The National Securities Market Commission (CNMV) classifies products as complex or non-complex, the latter being more recommended for novice investors. The non-complex investment products are those that meet four characteristics. The first is that they allow a refund and the prices are public, that is, they are liquid and their price can be known. The second is that the maximum money that can be lost will be the invested capital. The third, that the information on these products is easily accessible and, the fourth, that they cannot be defined as derivatives.
How do you know if a deposit is appropriate?
To know if a deposit is convenient, you need to think about your goal for money. If the main thing is not risk a euro of that money and get some profitability or you do not have any experience with investment products or interest in learning or the objective is to be able to withdraw the money in a more or less short period of time (for example a few months or a year), the option that is best fit would be the tank. With it, the profitability to be obtained and the period of time in which the money will not be available is known from the beginning, so all the conditions are established from the beginning. Also, the money is guaranteed.
Currently, in Spain the options with good remuneration from banks are few, but the internet allows you to contract fixed terms from other European banks. The Raisin online platform allows hire from Spain some of the best European warehouses. All are guaranteed by the guarantee fund of each country, which covers up to 100,000 euros per customer and bank.
And a simple investment product?
On the other hand, if the saver has investment knowledge or interest in learning and, in addition, is willing to take risks to obtain a higher return, with the possibility of losing money, he can bet on an investment product. Even more so if the money is not needed in the short term, to take advantage of the uptrend of the markets in the long term.
Currently, there are numerous possibilities to invest, either in mutual funds, in stocks, in ETFs, etc., but due to the low commissions that they impose, indexed investment funds can be especially attractive, a type of investment fund that works by replicating an index (the IBEX 35, for example), so it is intended to obtain the same profitability as this. Also, as the experts at HelpMyCash.com explain, they have lower fees than actively managed funds.
There are entities that give the option of contracting this type of index investment funds in the form of investment portfolios, that is, contracting a set of index funds and, in addition, obtaining advice to verify which of these portfolios is more convenient according to the risk profile. . They are the entities called robo advisors or automated investment managers, who ask the client a few questions about their financial situation and risk tolerance and, based on that, recommend a set of index funds or others. Examples of this are inbestMe, Finizens and Indexa Capital, which also allow you to invest from about 1,000 euros, in the case of inbestMe and Finizens, and 3,000 in the case of Indexa Capital.
The mistakes that should not be made
Of course, there are some key points that must be followed to start investing. First, you must always understand the product that is contracted. Second, it must be very clearthe term of the deposit that is signed or the ideal term for the investment that is being chosen. On the other hand, you have to know very well the profitability to be obtained with the deposit and the risks if you opt for an investment product. In addition, in the case of investment products, it should not be forgotten that a past performance does not guarantee a future one, they emphasize from HelpMyCash.com.
With these guidelines and being well informed to make the right decisions, the step from having the money in a savings account that does not have profitability to having it in a deposit or in an investment product will be a positive change than noticing the money.
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