A deposit with a variable interest rate based on the key rate of the Central Bank (Central Bank of the Russian Federation) may not provide significant financial benefits, but may be more affordable compared to standard products. Nikolai Kuznetsov, associate professor of the Department of Finance and Credit at the State Business University Institute of Economics and Finance, reported this to the Prime Ministry agency.
According to him, VTB plans to introduce a variable income deposit tied to the Central Bank’s lock rate. The expert explained that the maturities of such deposits may vary, but interest rates are calculated using the formula “basic rate plus or minus a certain percentage.”
The advantages of these deposits are especially noticeable during periods when the Central Bank increases the interest rate, which is usually associated with an increase in inflation. This leads to an increase in deposit profitability, which can offset the increase in prices. At such moments, banks offer more attractive conditions to depositors, but it is not always possible to close existing deposits and switch to them without losing interest.
To avoid getting into such a situation, a deposit with a variable interest rate can help: it is enough to open it once for a long time, and then its profitability will vary depending on the key rate. As Kuznetsov notes, the overall return on such a deposit will most likely be lower than with active financial management.
Investors are thus given the option of devoting time to management for a slight increase in profitability, or accepting a slight decrease in profitability and using their time more productively. According to the expert, such a tool will most likely be preferred by wealthy investors.
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