Having received a large amount of money after the sale of expensive property (for example, a car or apartment), the seller will certainly worry about the safety of the money. Many experts recommend investing any money in the business so that they work (and this really makes sense). But there are cases when, having sold one car (apartment, cottage), a person plans to buy another soon, then there can be no talk of any “work”.
On the other hand, searching for a new purchase can take quite a lot of time, during which the money needs to be stored somewhere.
One of the most successful options in such situations is the demand deposit.
You can, of course, rent a safe and store money there, but in this case you will have to pay for the rent.
In the same case, when cash deposits are opened, then, on the contrary, the bank will pay interest to the depositor.
Of course, if you open a demand deposit , you don’t have to count on high interest rates (in many banks the rate on such deposits does not exceed 1%), but the essence of this action is not to earn money, but not to worry about the safety of funds .
The main advantage of a demand deposit is the ability to withdraw money at any time without additional contracts, agreements and other paperwork. The main thing is that the cash desk should have the right amount in the right currency (for this it is advisable to order it in advance). Of course, there are other deposit programs, under the terms of which the client has the right to partially withdraw money from the account without terminating the contract, but they still require additional efforts from the client, and it is usually not possible to withdraw the entire amount from them.
In addition to unhindered withdrawal of money, a demand deposit is also good because it is opened for an indefinite period (the contract will be valid until the client closes it). Any fixed-term deposit can be made out only for a certain period, after which it can be automatically renewed, but it cannot last indefinitely - at a certain moment the deposit will cease to be prolonged. In general, the client will need to monitor the status of his deposit, which is not always convenient, and demand deposits do not need it.
As for the shortcomings of the deposit opened under the “demand deposits” program, the main one is low interest rates. If we consider all cash deposits in all banks, then demand deposits can be considered interest-free, the rate will be so insignificant. However, in situations of complete financial uncertainty, the demand deposit is just what you need. If after some time it turns out that money will not be needed in the near future, then it can be reissued for a fixed deposit in order to earn more interest.
It turns out that the type of demand deposit is an excellent opportunity to temporarily leave your money in the bank for storage, without paying any rent and without losing commissions when replenishing or withdrawing. But you should not constantly keep money on such a deposit - there are more profitable options.