Long-term deposits have been a debate between a group of people who believe it's wrong decision and people who think it's a good idea. Everything have a good and bad side, so it depend on individual to choose.
Here we will discuss the pros and cons as below:
Advantages
Get a fixed interest rate
When we have some money and do not need to use it, we can consider depositing in the bank that it can provide some interest rate between 3.5% - 4.5% per annum for differ from bank to bank.
High security and easy to check
Depositing money in the bank ensures the highest security, we do not worry about losing money by any mean of thief or accident that could destroy the paper cash.
It is easy to keep track of our cash as well, as banks have made it easier for costumer in their account with the modern of technology.
Good for saving purpose for a goal
Good for those who want to save to achieve any goal in the future, like for the children when they grow up or buying some properties. For you have to be clear that you don't need that money for the present day purpose.
Disadvantages
Difficult to withdraw for urgent need
Although deposit has some benefits, but it can have serious problem when we need it for urgent use. we have to make a request to the bank that will take some time and the money we deposited for a long time will switch to a regular savings account and may lose interest immediately.
Loss of opportunity to invest money in other sectors
Although we can get interest from the bank when we deposit money in the long run, this profit is still at a low level compared to investing this money in other sources such as doing business, investing in real estate or stocks, etc., which allows us to get more profit from the secure long-term deposit in the bank.
Profit is not worth the time investment
Interest earned on long-term bank deposits may not be appropriate for some people because they have block your money for a long time, but the rewards are small which is not appropriate for the time we invest.
