Are you confused about whether to save your money in savings or time deposits? Or are you still confused about the difference between savings and deposits? Come on, let's discuss the difference between savings and deposits is, so you don't save your money wrong.
What is Savings?
Savings is one of society's most familiar banking products and is widely chosen by customers. According to the OJK website, savings are deposits in a bank where withdrawals can only be made according to certain conditions. Generally, if you open a savings account at a bank, the bank officer will give you a savings book and ATM card along with a personal identification number (PIN) that you can use for transactions. However, now many banks provide mobile banking features so that savings books are rarely used, and you can also open savings and make transactions via mobile banking.
Based on the OJK website, savings have the following conditions:
- There is an initial deposit, and the minimum balance has different limits depending on the provisions of each bank.
- Interest or profit sharing for savings is smaller than deposits.
- There is a monthly administration fee, which varies depending on the provisions of each bank.
What is a Deposit?
In contrast to savings, time deposits are types of deposits that can be disbursed within a certain time and under certain conditions. Simply put, deposits are a type of deposit that can only be disbursed when the expiration date has arrived or cannot be disbursed at any time, like savings. Generally, the deposit period starts from 1, 3, 6, 12, and 24 months.
Deposit characteristics based on the OJK website:
- Deposits can be disbursed after the expiration period.
- Deposits that are due can be extended automatically or automatically roll over (ARO).
- Deposits can be in rupiah or foreign currencies.
The difference between Savings and Deposits
After knowing what savings and deposits are and their characteristics, we can find some differences between them. Here's the difference between savings and deposits:
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Initial deposit
Both savings and time deposits require the customer to make an initial deposit. However, the initial savings deposit is lighter than deposit products. There are initial savings deposits that start from IDR 100,000 depending on the product policies of each bank, while the average initial deposit for deposits is IDR 8,000,000
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Interest rate
The second difference is the interest rate. Savings interest rates are generally lower than deposits. The interest rate also depends on the nominal amount of the savings owned and the existence of monthly administration fees from the savings. Meanwhile, deposit rates are higher, and there is no monthly administration. However, you will be charged interest tax when withdrawing deposit funds.
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Term and Flexibility Withdrawal of money
The difference between savings and deposits is related to the time period and flexibility of withdrawing money. Savings does not have a certain period of time to withdraw money. So, you can withdraw money at any time without a due date. Meanwhile, deposits usually have a certain tenor starting from 1, 3, 6, 12, and 24 months. So, you cannot withdraw money from deposits before the maturity of the tenor. If you take the deposit money before maturity, you may be subject to a penalty.
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Purpose
The final difference is the customer's goals. Customers saving money in savings usually have a purpose for short-term needs such as daily transaction needs. In contrast, deposits are generally intended as a long-term investment for customers because they are the safest investment product.
Choose Savings or Deposits?
To choose the right savings product, you must ensure you are saving the funds you want. If you still need these funds for your daily needs, you can save them in savings. You can open a MAS Savings account at Bank MAS through an online account opening process that you can do from anywhere using the MAS Mobile application.
If your transaction frequency is minimal and you want to save funds for a longer period, you can choose deposits as the right banking product and a long-term investment. You can also open a deposit account at Bank MAS as one of the banks of your choice.
In essence, opening a savings and time deposit account is tailored to your needs and goals. You can save your funds in one of these banking products or even open a savings and deposit account simultaneously.
