A bank deposit is considered the most reliable way to save and increase your personal savings. Although it is not a high-yielding asset, it can at least help protect savings from inflation and will be an excellent tool for those who have just started to learn the basics of financial literacy and intend to start creating their own capital.

In this article, we will review the offer of the banks of Turkmenistan on deposits and answer the question – in which cases the transfer of personal funds to the deposit will be the right decision.

Briefly about what a bank deposit is

A bank deposit is when you give money to the bank for a certain period of time, so that it can use it in various operations, and then return it to you with interest.

For example, the bank may transfer the funds received from you to another person in the form of a loan. The borrower returns the loan to the bank with interest, and you then receive part of this interest.

Of course, this is an oversimplification, because once your money gets into the bank, it is stored in a shared account. Some types of deposits can only be used for certain types of bank operations. But the essence of this does not change.

The bank uses your funds at its discretion, makes a profit from this, and then returns the money to you with a small surcharge in payment for the fact that you temporarily provided it with personal assets.

Why are bank deposits considered a reliable investment?

Because banks are always insured, and even in the event of bankruptcy, depositors will receive their funds back.

Other types of investments have more risks. For example, company shares may decline in price, and payments to shareholders may not be made in different periods.

Deposits have a fixed interest rate, and whatever happens, you will receive the promised interest and the entire deposit amount. This must be specified in the agreement with the bank.

Deposit offers from banks in Turkmenistan

Let's look at examples of bank offers for deposits for individuals. More details can be found on the official websites of credit institutions.

*[Halkbank] (https://www.halkbank.gov.tm/ru/deposit * offers the population deposits from 4 to 10% per annum. The minimum deposit amount is 20 Turkmen manats. There are deposits for up to 3 and 6 months, as well as up to 1 year and 2 years. The longer the term of the deposit, the higher the interest rate on it.

The bank provides for monthly interest payments at the request of depositors, but it will not be possible to partially withdraw funds from the deposit. There is a deposit at an increased rate of 10% per annum for up to 1 year for citizens of retirement age.

All deposits in Halkbank are "on-demand" deposits, i.e. they must be fully returned to the depositor upon the first request.

State Bank for Foreign Economic Activity of Turkmenistan (SBFEAT) offers various types of deposits that are not limited in time and accepts funds both in cash and non-cash.

Also, at the request of the depositor, additional funds can be deposited, including automatically transferred from wages and other income.

SBFEAT also has a special term deposit named "Adult Gift" with a rate of 8% per annum. It allows parents of minor children to open an account at the bank, which can be replenished regularly and will become available to the child upon reaching the age of 18.

Turkmen banks often announce limited-time holiday promotions, in which certain categories of citizens can make deposits at an increased rate.

Thus, in honor of the Day of Healthcare and Medical Industry Workers, the Turkmenistan bank opened a depositnamed "Bagtyyar Lukman" for a period of one year and at a rate of 11% per annum. The service can be used by health workers in the country.

Similar actions were held earlier in honor of International Women's Day, Independence Day of Turkmenistan and other significant dates. You can find out about such actions on ORIENT.

How do I open a deposit?

You can open a deposit in any bank of Turkmenistan in a matter of minutes. It is enough to bring your passport and a copy of it, choose the necessary deposit and make a contract. There is nothing complicated in this operation, banks themselves are interested in opening deposits and simplify the process for depositors as much as possible.

At the end of the deposit period, you can collect your funds together with the accrued interest at the cash desk of the same bank, or ask the bank staff to transfer the money to your personal account.

Before opening a deposit, please note that it is term or on demand. If it is "term", then you will not be able to withdraw the invested amount until the end of the period specified in the agreement. If the deposit is "on demand", then you can return the money at any time.

When and who should open a bank deposit?

A bank deposit is perfect for those who have limited personal savings. The initial deposit can be even 20 manats, and then, as free funds accumulate, you can increase the amount of the deposit, if this is stipulated in the contract with the bank.

Various new financial instruments have started to appear in Turkmenistan, including:shares. Secondary market of shares, which will have the free market prices for securities, has also started to take shape.

At the same time, for novice investors who have just decided to get acquainted with the possibilities of saving and increasing capital, it will be safer and easier to start by opening a deposit in a bank. This will help answer the question: "are investments and other operations with moneyfor me?".

If the answer is yes, feel free to explore and try other, higher – yielding and at the same time riskier types of investments. If you find this topic interesting, please contact us via [feedback form] (https://orient.tm/ru/habarlash) or ourprofile on [Instagram] (https://www.instagram.com/orient.tm/), and then we will prepare materials that will delve deeper into the topic of investment in Turkmenistan.

Eziz OVEZOV
Photo: sib.fm