Both funds and deposits are common financial management methods, but there are still some differences. So do novices buy funds or go to the bank to save money? What kinds of deposits do you have? Bian Xiao has prepared something for you to buy a fund or deposit in a bank. I hope it will help you! For reference only!

Do novices buy funds or deposit them in the bank?

There is no fixed answer whether a novice buys a fund or deposits it in a bank. Investors need to consider their investment objectives and risk preferences. Fund means that investors entrust funds to professional fund managers for management and invest in different assets, such as stocks, bonds and money market instruments. Deposit means giving money to the bank, and investors can get interest according to the agreed interest rate and interest payment method.

Generally speaking, investors can choose to buy funds if they want to pursue higher returns and bear greater fluctuations and losses. However, it is necessary to pay attention to choosing the right fund type. Stock funds have high returns but fluctuate greatly, while money funds have low returns but are relatively stable. If investors want to ensure the safety of principal and pursue steady income, they can give priority to bank deposits. But you need to be careful not to believe the temptation of high interest rates, so as not to be deceived.

What kinds of deposits do you have?

1, demand deposit. Demand deposit refers to a deposit that has no fixed term and can be deposited or withdrawn at any time. Compared with other deposit methods, the interest rate of demand deposit is generally the lowest.

2. Time deposit. A time deposit refers to a deposit that has a fixed term and cannot be withdrawn until it expires. The interest rate of time deposit is higher, and the longer the general term, the higher the interest rate of time deposit.

3. Structured deposits. Structured deposit can be understood as that a part of deposit funds are deposited in the bank at a fixed interest rate, and the other part is deposited at a floating interest rate. The real interest rate of structured deposits depends on the investment situation of deposits, which may be higher or lower than the time deposit rate.

Do novices buy funds or go to the bank to save money?

First, in terms of risk, the two are fundamentally different. No matter in any country, deposit is an extremely special financial management tool. In many countries that have not implemented deposit insurance system, in a sense, deposit represents the credibility of the government to a certain extent, and it is the most basic capital preservation product, and theoretically it is an investment product with absolute capital preservation. As far as China is concerned, in the Deposit Insurance Regulations, the safety of deposits is protected by law. Even in the worst case, if the financial institution where the deposit is located goes bankrupt or insolvent, the deposit can be insured up to 500,000 yuan, and the amount of this guarantee will change with the development of the economy.

Money funds are different. From the practical point of view, the money fund does not lose much. But in extreme cases, the money fund may lose money. For example, in the face of the sudden massive redemption of the money fund, the bonds that could have been held at maturity can only be sold at a loss, which may make the net value of the fund fall below the face value. At the same time, when there is an extreme financial crisis, it also faces the possibility of losses. For example, in the 2008 financial crisis, the oldest money market fund in American history, main ReservePrimaryFund, once fell below the par value of 1 USD, resulting in a rare loss in the history of the money fund.

Second, from the cost point of view, fund companies will charge management fees and custody fees for investing in money funds. That is to say, the income earned by an individual is the result of deducting a certain rate. Although the money fund rate is the lowest in the fund, there will still be a certain rate. Income from individual investment funds shall be exempted from individual income tax. Bank deposits repay the principal and interest as agreed, and the interest rate is agreed in advance, without any fees, and the interest income obtained is also exempt from personal income tax.

Third, from the way of income settlement, bank deposits pay interest according to the time agreed at the time of deposit. For example, demand deposits pay interest quarterly, and time deposits pay principal and interest in one lump sum at maturity. These settlement rules are well known to depositors, and there will be no difference between different banks. However, different monetary funds may have great differences in settlement. For example, in recent years, money funds have accrued income on a daily basis, and some have settled income on a monthly basis or in other cycles. Most investors hardly pay attention to these settlement rules, and relatively speaking, investors will have a lower understanding. This difference will have a great impact on the return on investment. For example, the daily settlement of the money fund is standard compound interest, and the income obtained on each working day will participate in the income calculation of the next day. The actual rate of return obtained by investors is often far from their own understanding of the rate of return. The monetary fund with monthly income is more similar to bank deposits to some extent, which can be simply understood as the calculation method of simple interest.

Fourth, in terms of the transparency of investment products, the transparency of money funds is much higher than that of bank deposits. Monetary funds, like other funds, need to disclose information such as the proportion and scale of their positions on a regular basis and make it public once a quarter. For investors, they can clearly understand which assets they have invested in the money fund, how safe they are, how the income of these assets is, how much management fees the fund company has collected and so on. The purpose of bank deposits will not be publicized, and depositors will not know their existence. The specific purpose of bank money is to lend it to individuals or enterprises.

How to buy a novice fund?

First, make a risk assessment to confirm your risk preference. This will mainly involve your basic income, investment and so on. For you to choose, so as to find out whether your preference is conservative, conservative or enterprising.

Second, choose the right fund type according to your risk preference. Equity funds have the highest risk, and the previous minimum shareholding ratio is not less than 60%. Now the minimum shareholding ratio of new issuance is not less than 80%. Followed by mixed funds, bond funds and money funds. Of course, the higher the risk, the higher the rate of return. The annualized rate of return of general money funds is around 5%, bond funds are around 8%, mixed funds are around 10, and stock funds are above 15. It is also related to the performance of the selected fund. If you lose, the income will be the same.

Third, choose a fund company with a certain scale and performance.

Fourth, properly refer to the past performance of the proposed fund, at least in the middle. At the same time, look at the length of time and historical performance of fund managers.

Fifth, read the fund documents carefully. Understand the fund's investment philosophy, investment direction, fund heavy position and performance benchmark. Understand the expenses of fund subscription, redemption, custody and management.

Sixth, properly consider the timing of purchase. Generally, they buy on dips and advocate long-term investment. Those bought before three o'clock shall be subject to yesterday's net value, and those bought after three o'clock and before three o'clock the next day shall be subject to the net value of the day of purchase.

Why is it safer to deposit time in the bank?

Bank time deposits are guaranteed by deposit insurance. According to the standard of deposit insurance, an individual deposit of 500,000 yuan can be guaranteed by deposit insurance. Regardless of whether the bank has the ability to cash this asset, the deposit insurance fund will cover the investors' deposits when cashing it. There are conditions for deposit insurance: banks must pay deposit insurance according to regulations, and the deposits of financial institutions that pay deposit insurance will be protected by deposit insurance. China stipulates that all financial institutions with deposit business need to pay deposit insurance. In other words, investors can enjoy the protection of deposit insurance as long as they deposit their money in the bank. At the same time, deposit insurance has a general restriction on the safety of deposits, and everyone can get the protection of deposit insurance if the deposit in a bank does not exceed 500 thousand.