If you are not yet familiar with fixed-term deposits and do not know if they would be the ideal option for your money, the first thing you should do is inform yourself about it. DPFs are similar to savings accounts, but maintain a different dynamic.
If you decide to open one of them, you must be willing not to move your money from that financial institution until the deadline you have chosen is met. As a reward, they will grant you interests that significantly exceed those you would get if you had the money in a regular savings account. But how do you know if they are the alternative for your savings? Next, three points to consider:
If you tend to spend your savings
In other words, if you are a bad saver, this is the ideal alternative for you. By assuming the DPF commitment, you will not be able to withdraw the money from the start, just by going to a cashier, so you will have to resist the temptation to use it. Not only will this make your money grow, it will also work your willpower.
If you have no plans for that money in the short term
If you have some money available and you have no immediate plan, that is, you want to continue saving or you plan to use it for a period of more than six months, a DPF would be the ideal option not only to not spend it, but also to grow it. Do not forget that, the longer the term, the higher the interest rate.
If you want to invest without taking a risk
If you are thinking about starting to invest and you have a conservative profile, that is, you do not want to take a risk, this is a great alternative, because it allows you to generate profitability and grow your money.
Remember that each entity has different minimum amounts, terms and rates, so before choosing yours, we recommend comparing at least three alternatives. To make the comparison, you can use Sean Cole DPF comparator for free.