Deposits in Ukraine are the most popular way to save and increase funds. This is understandable, because in comparison with other types of investment instruments, placing a deposit in a bank is quick and easy with almost no investment risks. Of course, low risk, in turn, translates into low profitability, but at the same time, the income on the deposit is clearly defined and guaranteed. What types of deposits are available and which one is better to choose?
Types of bank deposits by currency
You can place a deposit in Ukraine in Ukrainian hryvnia, US dollars or euros. When choosing a deposit currency, first of all, start from the currency in which you have funds now and in which currency you will need them upon completion of the deposit, so as not to lose on forex exchange. Interest on deposits in foreign currency is significantly lower than in the hryvnia, since it depends on the forecasted level of inflation for a certain currency, as well as on the need of banks in this currency. At the same time, it should be understood that you are guaranteed to receive hryvnia in cash, and with the issuance of currency there is a minimal, but still risk of difficulties due to possible interruptions in providing foreign currency to bank cash desks. If you want to fully protect your savings from depreciation by placing them on a deposit, Ukraine is now experiencing significant inflation, which deposit rates are not able to cover completely. However, in any case, the impact of inflation on your savings will be incomparably less.
Along with cash deposits, there are deposits in banking metals or, as they are also called, metal deposits. Ukraine, however, is not the country where they are popular, unlike, for example, the countries of the Middle East. Usually, when placing deposits in banking metals, you deposit funds into the account in the amount of the value of a certain mass of metal, and after the expiration of the deposit, the bank gives you funds in terms of the value of this mass of metal on the day the deposit is returned, along with accrued interest.
Types of bank deposits subject to early termination
There are term deposits, which you place for a certain period, and deposits on demand, which are returned at the first request of the client. Demand deposits are mainly connected as an additional service to a bank card.
Term deposits, in turn, can be placed without the right to early termination or provide for the possibility of withdrawing funds before the expiration date. If the terms of your deposit do not provide for early termination, then you will be able to receive your funds only after the expiration of the deposit. The return on deposits with the early termination option will always be lower, and if you still withdraw the deposit ahead of schedule, your income will be transferred at an even lower penalty rate.
Types of bank deposits by placement period
By terms of placement, term deposits of Ukrainian banks range from a minimum of 1 month to a maximum of 24 months with a classic gradation of 3, 6, 9, 12 and 18 months. In some cases, banks indicate the term of the deposit not in months, but in days, and sometimes they offer not quite standard terms, for example, 2 or 7 months.
Types of bank deposits by method of interest payment
There are three classic options for paying deposit interest – at the end of the term, monthly or capitalization of the deposit, when the interest paid is attached to the body of the deposit automatically. You can also find deposit programs with quarterly interest payments or in advance for the entire term of the deposit on the day it is placed.
Types of deposits with interest payments at the end of the term or capitalization are suitable for you if you want to accumulate the maximum amount of money, and a deposit with a monthly payment will bring you regular additional income.
Please note that the interest you receive on the deposit is your income, which, according to the law, is a subject to mandatory taxation in the same way as other types of income. From December 1, 2024, the deposit tax in Ukraine is 23%. There are also tax-free deposits, which are mainly available to recipients of payments from the state, and in practice, it is almost impossible today to find such a deposit in Ukraine.
Types of bank deposits according to the possibility of replenishment and withdrawal
Deposits of Ukrainian banks can provide with the possibility of replenishment and withdrawal. Interest on such deposits, which offer more flexibility for the depositor and less predictability for the bank, will always be lower than the rates on classic deposits. The minimum and maximum amounts of possible deposits and partial withdrawals are limited and determined by the terms of the contract.
Now, when you understand the types of deposits and their features, it will be easier for you to choose those conditions that are most suitable for your needs.
