Risk of deposit withdrawal before maturity
Risk of deposit withdrawal before maturity

Risk of deposit withdrawal before maturity

Risk of deposit withdrawal before maturity

Operatorkita.com Risk of deposit withdrawal before maturity – Deposits are a financial instrument and investment vehicle that is quite well known among the public. Multiple deposit products in the portfolio are relatively safe and profitable compared to other investment vehicles.

Term deposits offer an attractive interest base with a guarantee without a reduction in the principal value of the funds. Monetary interest rates are relatively fixed, but sometimes they change or fluctuate. So, even if the interest income changes (down or up) due to interest rate fluctuations, the principal value of the investment money in the box will not change.

Although repositories are an attractive option to invest in, this does not mean that they are a risk, especially when it comes to using or sending guests who cannot wait for “harvest” time after planting repositories. Bank deposits cannot be made at any time as I switched my ATM card from a savings account.

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Pay before the due date

Generally, the maturity period of bank depositors is about one month for three years from the time we open a deposit account.

However, some money customers often want to “harvest” their deposits and proceed to pay us before the bank, the due date. On average, their reasons are as follows:

You need money for emergency needs

Indeed, at the beginning of opening a deposit account, they will definitely save their money for future purposes.

However, due to the sometimes uncertain needs of everyday life, unexpected or emergency expenses may arise. As a result, money needs immediate customer liquid funds, including urgent bank deposits before maturity.

Increase “pull” interest rates higher

At certain times, the Bank for changes in the interest rate policy on the banking product (including term deposits) provides to its customers, in accordance with banking regulations.

As an illustration, if the bank deposit interest rate in May 2014 was 3.25 percent for 12 months. Then, the following year, the bank set another rate hike to 5 percent.

If the customer submits to enjoy an increase in interest, then he must immediately withdraw the money account before the maturity of June 2015 and immediately open another deposit account with the new interest rate rules.

Risk

If you want to continue sending money before entering before the deadline, you may have some side effects and you cannot avoid the risks, which are as follows.

Risk of loss penalty (fine)

This penalty is used by banks as a major measure to “warn off” their customers who are impatient to pay depositors’ investments.

This fine is in the form of an administrative fee by deducting the interest on your deposit with the bank’s penitent number (percentage). The average penalty varies from 0.5% to 3% change for each bank in Indonesia.

Direction of interest paid on deposit

In addition to the penalty, interest was placed on an open cash account, at risk of being canceled or not paid if the customer rushes to withdraw the money by sending.

Lower interest income risk

The risk for customers who insist on “harvesting” early is that the interest income will be paid by the bank to reduce the interest rate that was placed on the open account.

So the amount of interest income you receive after bank deposits before the specified time will be adjusted for the duration of your bank and of course will change less than the amount of money agreed upon at the initial opening.