Savings options that pay off

Savings options are really rich nowadays and you just have to choose. If you have not yet been completely enchanted by saving, it is high time to start thinking about it. The general definition of the term savings is pretty straightforward. It is an activity in which savings are made that can be used for anything.

• Creating financial savings
• Asset valuation
• Raising capital

Of course, with savings you can choose and indulge in different options. There are several products that can help you achieve the desired appreciation. The savings options are safe, low and conservative on the one hand, and profitable and risky on the other.

Savings accounts as an absolute basic

If you're a risk-averse, security-minded person, savings accounts are the perfect choice for you. These savings options won't earn you as muchon the other hand, you don't have to worry about your finances. There are several key advantages in favour of savings accounts, which we will now introduce you to.

Subject	Value
Fee	Usually zero
Handling money	Fast and flexible
Insurance	Up to EUR 100 000
Amount of appreciation	Low unit percentages

You may not earn as much with a savings account, but you can be sure you won't lose your money. Savings options of this type are sought after across all generations. Perhaps it's also because most banks offer a savings account as a free part of a regular bank account.

Disadvantages of a savings account

It should be noted that a savings account is primarily associated with only the pros. Among the cons, perhaps only the lower interest rate can be included. Risk and safety are therefore perfectly balanced and depend on your choice. Although these are rather exceptions, some banks encourage the establishment of savings accounts by opening a classic account.

A savings account is primarily used to value your finances. Therefore, special payments in the form of direct debits, standing orders, etc. are not normally made from it.

William S., bank clerk.

There is probably nothing else that can be said about savings accounts. They don't even come with a lock-in period, so the money is essentially immediately available to you and you can dispose of it as you please.

Savings options - Term deposits

There are, of course, alternative savings options. A typical example is time deposits or otherwise known as term accounts. The meaning of this phrase reveals a lot. It is a special bank account designed only for the appreciation of money. However, it differs from a savings account in a few key ways.

• Fixed interest for as long as the money is deposited
• Finances cannot be disposed of
• Different time deposit periods

While term deposits offer better appreciation than savings accounts, on the other hand, you cannot dispose of the money. You usually pay a fee for early withdrawal. So these savings options have different terms and conditions, which may be beneficial for some people, but not for others.

Pension savings is another option

Savings options also include supplementary pension schemes. This is essentially saving for retirement. This is with the help of the state, and hence the state contribution. Pension saving also involves tax savings, the possibility of pre-retirement or employer contributions. The popularity of supplementary pension insurance is shown in the table below with historical data on the volume of funds managed under this product in the Czech Republic.

Year	Volume in billions of crowns
2007	162 104
2013	280 688
2017	383 945
2019	427 017
2021	465 788

On the other hand, it should be taken into account that supplementary pensions are one of the savings options with lower liquidity. You have more or less no control over how the money you invest is invested and you pay a fee on the annual appreciation.

Savings options - Building Savings

For many years, this financial product was praised as a certain security in the form of a state contribution and adequate appreciation of the balance. The gradual reduction of the state contribution makes it a rather interesting way to get a loan from a building savings fund for housing.

Building savings serve not only for the appreciation of money, but also as an opportunity to obtain a bridging or regular loan from the building savings.

Emma S., Financial Advisor.

This product is primarily intended for natural persons with permanent residence in the Czech Republic, including citizens of the European Union with a residence permit in the Czech Republic.

Savings options in mutual funds

Mutual funds are associated with the term collective investment. In essence, it is a collection of investors' assets. This is then managed by a third party. As investors, you put your money into a specific fund. Assets of a different type are then purchased.

• Bonds
• Shares
• Share certificates

Savings options in the form of mutual funds are usually linked to a bank or other institution through which you can invest your funds. You can read about the advantages and disadvantages of mutual funds in the following lines.

Types of mutual funds

If you de decide to put your money in mutual funds, you should know as much as possible about them. For example, that mutual funds are classified by asset class. There are several of them and you can see them in the table below.

Subject	Value
Equity funds	Shares
Bond funds	Bonds
Funds of Funds	Other funds
Mixed funds	Mostly bonds
Commodity funds	Securities

To make matters worse, mutual funds can also be approached from a strategy perspective. Such savings options can take the form of conservative mutual funds, balanced mutual funds and aggressive mutual funds.

Pros and cons of mutual funds

The advantages and positives definitely include the time saved in managing such an investment. You can allocate your funds primarily based on your risk tolerance. Moreover, mutual funds are also ideal for smaller investors.

Savings options of this type are abundant. On the other hand, higher initial costs for mutual funds must be taken into account.

Mike S., financial advisor.

In order not to just praise mutual funds, it is right to mention less flexibility. At the same time, bear in mind that with the size of the profit also comes a level of risk. This is precisely why mutual funds are not for everyone.

Other savings options

When you say savings options, you can think of some other products. For example, deposit books are a historical issue that have lost their attractiveness in these modern times. A chapter in itself are also Cryptocurrencies. However, these are among the riskier investments and definitely require knowledge of the segment.

Frequently asked questions and answers

Now you know that the options for saving money are really varied and there is something for everyone. If about different types of savings and investments want to know more, read the following questions and answers. They may help you make better decisions about how to value your savings.

There are savings options for everyone

Don't let inflation slowly eat away at your savings and bet on today's savings options. Choose a product that will to suit primarily in terms of risk, valuation and associated matters. Save for a rainy day and grow your finances.