Savings are the sum of money that remains after all the personal consumption costs are deducted from the incomes earned in a definite period of time. This money can be kept at home or in the wallet, but it is more sensible to keep them in banks. The simplest form of keeping savings at a commercial bank is in checking accounts. The information is published by the National Bank of Moldova within the information campaign carried out together with the National Commission for Financial Markets as part of the financial education project “Learn. Give Sense to Money”, IPN reports.
When a person accumulates substantial reserves of money, the savings can be used as investments. The national financial market has a limited number of available savings or investment instruments, but the related aspects and risks should be known.
The bank deposit is the main available form of keeping the money in Moldova. This financial product consists in the leaving of a sum of money at the bank for a definite period of time in exchange for interest. The money is put into an account and the holder can take it back in accordance with the contract conditions.
For some categories of people, the money kept at the bank can represent essential savings for the daily life, such as the salary, pension, unemployment benefit or allowance intended for socially deprived groups of people. The state guarantees the deposits in banks in Moldova through the Bank Deposit Guarantee Fund that ensures the return of 50,000 lei in the case of deposits in lei and in foreign currencies if the bank goes bankrupt, regardless of the number of deposits and their size.
Also, the persons can make deposits at Savings and Loan Associations. These financial institutions usually work in rural areas and are aimed at facilitating access to financing for association members. Before making deposits or being able to raise loans, the person must become a member of the association and pay membership dues. Unlike bank deposits, the savings left with these associations are not guaranteed and the depositors thus fully assume the risk.
The term “financial investment” refers to any amount spent on financial assets with the aim of making profit. The most frequent financial assets are the shares, bonds, facultative pensions, life insurance and other instruments. The national financial market provides a limited range of financial assets that can be bought by private individuals for investment purposes. Only the state securities issued by the Ministry of Finance for financing the public debt, shares in companies that are traded on the stock exchange and some of the facultative pensions plans or life insurance are available at theoretical level.