Deposits of 2023 in Ukraine are one of the most affordable and safest opportunities to protect and multiply savings. In this article, we will analyze the options where to invest money during the war, consider their advantages and disadvantages, and decide whether it is profitable to open a deposit in 2023.
Types of passive income
If you are wondering where to invest your money during the war, there are a number of passive income opportunities for your savings:
- Deposits in banks
- Shares of foreign companies
- Real estate
If we evaluate each of these options according to the criteria of riskiness, minimum amount, yield and availability, then the best place to keep money during the war is time deposits in banks. Next, we will take a closer look at why deposits are an absolute favorite compared to other investment tools.
Advantages of deposits
- Low risk. All Ukrainian banks are members of the Individual Deposit Guarantee Fund. During martial law, the full amount of the deposit and accrued interest is guaranteed, and even in the event of bank bankruptcy, the deposit refund mechanism is well-established and takes a minimum of time. Therefore, if you decide where it is better to keep money during the war, then in the case of a bank deposit, you can be absolutely sure that you will get back not only the invested funds, but also the income received from them.
- Accessibility and simplicity. In a matter of minutes, you can find out reliable information about any bank on the NBU website, and quickly view and compare interest rates on deposits in different financial institutions on bank websites. A deposit can be placed in any branch of any bank in a maximum of an hour, and for current bank customers - in a few clicks in online banking, without leaving home. For this, it is not necessary to have additional knowledge, engage a broker or open an account in a foreign bank.
- Stable passive income. Deposits in 2023 have shown the highest yield in hryvnias over the past three years and can currently bring you a record 20% per annum. At the same time, such a high rate can be for both short-term and long-term deposits. An additional advantage is that the amount of income and the date of its payment are clearly defined and do not depend on market fluctuations or any other factors, as, for example, in the case of buying shares or gold.
Why it is profitable to put money on a deposit in 2023
Ukrainian banks have been working in the conditions of a full-scale war for almost a year and a half and at the same time they provide financial services in a full, stable and uninterrupted manner. This is a strong proof of the stability and reliability of the banking system, which, in turn, increases the trust of the population in banks. The level of trust in the banking system, even during martial law, is confirmed by the trillion hryvnias that Ukrainians keep in bank accounts.
However, it is noteworthy that two-thirds of individuals' funds were kept not in deposit accounts, but in current accounts, where they were inexorably depreciated. Therefore, in order to protect hryvnia savings of the population from inflation and support exchange rate stability, the National Bank took a number of measures, such as a high discount rate and mandatory reserve standards, as well as deposit certificates, which encouraged banks to attract public funds specifically for time deposits.
Financial institutions began to actively encourage their depositors to transfer funds from current accounts to time deposits. And the first stimulus, of course, is the interest rate. Over the last quarter, the yield on deposits in most banks has increased significantly, and today you can get 20% per annum in hryvnias on a time deposit. In this case, the after-tax rate is more than 16% per annum. At the same time, consumer inflation in Ukraine continues to slow down - to 15.3% according to the results of May and to 14.8% forecast by the end of the year. So, deposit rates already completely cover inflation and will protect your capital from depreciation.
Will interest rates on deposits increase in 2023
In our opinion, today the level of deposit rates is already at its peak and will not change significantly until the end of this year. Especially if we take into account the recent forecasts of the National Bank regarding the reduction of the discount rate already in the fourth quarter of 2023, after which the steps of banks in the deposit market have already become more cautious. The expected reduction in the discount rate will lead to a gradual stabilization of deposit rates as well. Interest on foreign currency deposits, on the contrary, is at a minimum level and there are no prerequisites for their growth.
So, if you want to protect your savings from depreciation and place a hryvnia deposit in 2023, then now is the best time for this, and if you want to place funds profitably, choose deposits with Agroprosperis Bank.