Recent survey data from the All-Russian Center for Public Opinion show that 27% of Russians currently have no savings, a figure that dropped from 64% a year and a half earlier. This pattern reflects cautious saving during times of crisis, though impulsive purchases can still arise after troubling news.
Anton Prokudin, chief macroeconomist at Ingosstrakh Investments Management Company, notes that such purchases rarely end well. “This applies not only to consumer goods and services but also to durable items. For instance, apartments bought in a panic in December 2014 or March 2022 lost value in ruble terms the following year,” he explains.
Therefore, keeping money liquid, saving aggressively, and seeking growth remains prudent. The main tools today include bank deposits and savings accounts, with federal loan bonds, conventional bonds, and stocks available in the equity market. Real estate can also be a viable path to earnings.
The most reliable security
Deposits and savings accounts currently offer interest rates that exceed both actual and expected inflation, around 12% per year in some markets. Central banks have reported price increases and various inflation readings, with projections suggesting a possible softening by year-end. Experts like Vitaly Kostyukevich, head of retail products at Absolut Bank, anticipate inflation easing to roughly 6% by year-end, while Natalya Vashchelyuk, chief analyst at Sovcombank, notes that with stable currency conditions, inflation could hover around 8–9% mids of 2024. In this environment, deposits help preserve purchasing power.
Deposit insurance protects these accounts: a national agency guarantees a substantial portion of deposits if a bank fails. Some terms may restrict withdrawals before maturity, potentially incurring a small fee. Customers can withdraw from savings accounts without losing accrued interest, and these deposits are state-insured.
For those not planning large purchases soon, opening a three- or six-month deposit can fit a diversified savings strategy. Current top rates favor short-term deposits around 10–12% per year for three months, while longer-term deposits can offer similar yields. Analysts caution that the best options shift with market conditions, so it’s wise to review all terms before opening an account.
Experts also warn that banks may adjust deposit terms, including lowering interest rates by a few percentage points in a short period. Flexibility in deposit conditions warrants careful scrutiny before committing funds.
Stock market strategies can protect and grow savings. The share of individuals opening brokerage accounts has risen, with authorities reporting millions of accounts at the end of a recent quarter—signaling broader participation in equity markets. Stock investments can preserve capital and generate long-term growth when held over multiple years.
The safest and the riskiest options
Government bonds with fixed coupon payments are considered among the least risky instruments in the market, delivering defined income at issue and repayment at maturity. Some bonds can be purchased at a discount to face value, increasing yield through amortization. Longer-dated issues may offer higher yields, but they also come with greater interest-rate and geopolitical risk. Shorter maturities from reputable issuers often provide solid returns with reduced risk.
Bonds are debt securities that offer fixed income over a set period, as money is lent to a government or company with a return plus interest on a specified date. In the current climate, favoring shorter issues from credible issuers—one to two years—can yield above 10%. Long-term bonds carry higher risk and uncertainty, according to analysts.
Some brokers enable buying a broad range of government and foreign-currency bonds, offering various risk and return profiles. Foreign currency bonds yielding around 8–10% in USD or EUR can protect savings if currency expectations stay favorable, though currency movements must be tracked closely. Holding foreign bonds during periods of strong domestic currency can be detrimental.
Stocks remain the riskiest yet potentially most profitable option. Shares symbolize ownership in a company and entitle the holder to a portion of profits via dividends. Stocks are often the main source of long-term returns when held for several years, and certain accounts can offer tax advantages, subject to simple rules. Profitability depends on maintaining favorable financial ratios and market conditions.
Current ideas for profit in the stock market include share repurchase programs and dividend prospects from major industrials and financials. Analysts also point to leading banks and resource companies as potential candidates for evaluation.
How to make money in an apartment?
Real estate remains a popular investment vehicle. Analysts note that a significant share of real estate purchases are for investment purposes. Renting an apartment can provide steady income, while resale can be viable, especially when buying in developing markets or new developments on the secondary market. Prices have shown resilience and have not collapsed as of yet.
Property investment requires ongoing costs and maintenance, including utilities, repairs, and insurance if mortgaged. In new-build purchases, immediate rental income is unlikely, and delivery and renovations may take time. The potential benefit lies in price appreciation rather than quick gains, according to the analysis.
Experts caution that real estate does not shield against currency devaluation in the long run. The prospect of visible profits should be weighed against rising mortgage costs and softer rent demand.
Sellers and lenders may advise that even a rentable apartment is unlikely to sell in a day or two. Packaging it into a structure like a closed-end mutual fund could enable quicker real estate portfolio trading and potential value growth.
What should an investor choose?
Financial advisors emphasize calculating mandatory expenses and analyzing their share in the budget before choosing an investment. If the financial burden is manageable, determine which purchases the family will need in the near term and spread costs over the period. Funds for current expenses can still be directed toward the market.
Analysts suggest starting with a modest amount for a short period, offering low risk, simple savings management, and solid guaranteed income. A small upfront deposit for a few months can yield a predictable return, and a longer horizon with more funds can provide additional opportunities. ADvisors also point to short-term bonds or equivalent instruments for savings beyond a few months.
Prudence matters: the amount of free money determines strategy. If funds are under a certain threshold, staggering deposits makes sense; if larger, diversification is prudent. Some capital can be directed toward securities such as bonds while keeping real estate options in view. Portfolio diversification is advised, suggesting allocations like a majority in bonds with a smaller portion in stocks, or a heavier bond tilt depending on risk tolerance.
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