In December, the Bank of Russia raised its key interest rate for the fourth time this year. Its magnitude was 16%. This has led to an increase in the profitability of a number of insurance and banking products. The next meeting at which a review is possible is not scheduled until February 15, 2024.
One consequence of the base rate growth cycle has been an increase in the profitability of some insurance and banking products. And this is a good opportunity to fix a high percentage on products and get a good profit.
Interest rates on deposits in Russian banks began to increase in the summer months. This growth continued in the fall and winter; You can now see offers of up to 16% per annum in some banks.
Another trend is that the rate of return on short-term products has already exceeded long-term programs. This needs to be used. Of course, you can keep the money in a safe and in cash, or you can keep open deposits at the same interest rates, but then the losses due to inflation risk will be higher.
If you have savings that you do not plan to spend in the near future, it is a wise decision to secure maximum profitability by taking advantage of attractive offers.
You should not close deposits opened a long time ago. Products that have the possibility of losing their accumulated interest in case of early closure and which exceed the possible income in case of opening a new deposit.
It’s important to remember to diversify. Ideally, it is better to divide your savings into several deposits with different terms and conditions for rollover and withdrawal. This will avoid unpleasant consequences in case of further fluctuations in rates.
Another consequence of the increase in the key interest rate of the Central Bank of the Russian Federation was the emergence of high-yield savings instruments on the market. These are some endowment life insurance schemes.
Rates can now exceed 20 percent. Maximum income can be obtained by concluding a contract for a period of more than 10 years, for example. So the rate is fixed. In addition, such programs provide the opportunity not only to save and increase savings, but also to receive insurance protection.
Do not forget about the possibility of receiving a tax deduction for endowment life insurance programs issued for a period of 5 years or more.
Additionally, due to the transformation in endowment life insurance products, some insurance companies have begun to increase redemption amounts. This means that you can terminate the contract if necessary without losing most of the invested funds.
While there will be no change in inflation expectations in the coming year, deposit interest rates will remain at very high levels. In practice, deposit interest rates vary in the same direction as the main interest rate.
Offers with higher odds will remain. The focus is already on the sale of short programs with maturities of up to three years, the profitability of which is quite attractive from the first year.
It is also possible to introduce products with more attractive return conditions in savings programs. In addition, starting from 2024, flexible insurance may appear in Russia, where the customer can manage his insurance coverage and quickly connect the necessary options.