When a person has free money, it is important to find the right use for it. First of all, it is necessary to determine what goal the owner is pursuing. One of the tools for saving and increasing funds is a bank deposit. Sberbank offers a range of deposits with different conditions. When deciding to place money on deposit, the client is faced with a number of questions.
- How long does it take to open an account?
- Choose a deposit with the ability to withdraw, top up, or both?
- What is capitalization?
The concept of capitalization of a deposit in Sberbank
Capitalization is the accrued interest, which is added to the principal amount of the deposit. Interest is accrued for the period specified in the agreement (usually monthly). As a result, the initial deposit amount increases and in the subsequent period interest will accrue on the increased deposit amount. To complete the picture, let's look at a simple example. The following conditions are given:
- amount - 100,000 rubles;
- term - 1 year;
- rate - 6%;
- withdrawal and deposit is impossible;
- capitalization - monthly.
IMPORTANT!
The bank agreement for opening a deposit always specifies the annual interest rate.
Let's calculate what amount will be on deposit in the first month: D1 = 100,000 + (100,000 * 6% / 12 months) = 100,500 rubles. Next month the amount will be: D2 = 100,500 + (100,500 * 6% / 12 months) = 101,002.50 rubles. This way you can calculate your income for each month. In order not to waste time on lengthy calculations of deposit income for each month, a single formula for calculating profitability with monthly capitalization is used: D = C * (1 + P /12) T, where D is profitability; C – initial amount; P – annual interest rate; T – term (in months). The annual yield in our example will be: D = 100,000 * (1 + 6% / 12)12 = 106,167.78 rubles.
Capitalization terms
Capitalization of deposits differs by the period after which interest is accrued. This may happen:
- daily;
- monthly;
- quarterly;
- semiannually;
- annually.
The main line of deposits at Sberbank uses monthly capitalization. These are “Save”, “Replenish”, “Manage” deposits. “Pension Plus”, “Social” and “Gift of Life” have quarterly capitalization. For special deposits that the bank offers as a special offer, there is no capitalization, interest is accrued at a time, at the end of the contract. But at the same time, the interest rate is higher than on basic deposits.
The influence of the frequency of interest accrual on the profitability of the deposit
As discussed above, Sberbank mainly uses monthly and quarterly capitalization. Semi-annual and annual are the least profitable for clients, especially in cases where the deposit period is 6-12 months. If we consider shorter periods of interest accrual, for example, daily, then this is definitely the best option for the client. Daily interest accrual contributes to the daily increase in the deposit amount, and the total profitability increases accordingly.
IMPORTANT!
The more often interest is accrued on a deposit with capitalization, the higher its profitability.
Using the example above, let's consider what income will be on the deposit with semi-annual capitalization. To do this, we need a formula for calculating profitability at different frequencies of interest accrual: D = C * (1 + P / m) m * n, where m is the number of interest accrual periods (semi-annually m=2; quarterly m=4; monthly m =12); n – number of years. D = 100,000 * (1 + 6% / 2) 2*1 = 106,090 rubles. 106,167.78 – 106,090 = 77.78 rubles. The amount received is the client's benefit for monthly capitalization.
Maximum possible income amount
Using formulas, you can calculate income with absolutely any frequency of interest calculation. Let’s imagine that accrual is ongoing, without interruption over time. This way we can find out what the maximum possible amount the client will receive at the end of the contract. The formula for calculating profitability for continuous capitalization is as follows: D = C * (e) P * n, where e is the exponent (Euler number), e ≈ 2.718. Let's look at our example. D = 100,000 * 2.718 6% * 1 = 106,182.99 rubles. This will be the maximum possible amount of client income with continuous capitalization.
How to calculate the real return on a deposit
The deposit rate that the bank offers the client and is specified in the contract is called the nominal interest rate. Income on it is calculated without taking into account capitalization. For example, a client opened a deposit in the amount of 100,000 rubles for 1 year and withdraws the accrued interest monthly, in this case the income will be calculated at the nominal interest rate. If the client does not use the account for a year, then capitalization occurs and the income will be different. In this case, the real yield can be calculated using the effective interest rate.
IMPORTANT!
The effective interest rate is always higher than the nominal interest rate.
On the Sberbank website, in the information about deposits you can see both nominal and effective interest rates (interest rates on deposits in Sberbank).
Client benefit when choosing a deposit with capitalization in Sberbank
Calculations of profitability on deposits with different periods of capitalization showed that the more often it occurs, the more profitable it is for the client. An example of semi-annual and monthly capitalization was discussed above. Sberbank uses monthly and quarterly in its practice. The main condition is that the money must be inviolable until the very end of the contract. Otherwise, the client will not be able to receive any benefit from capitalization. Not all banks offer capitalized deposits. Very often, the client sees high deposit rates in advertising offers, and without hesitation takes the money to this bank. And as a result, he gets a return that is not at all what he expected.
IMPORTANT!
You should always carefully study all the terms of the banking agreement. Often behind a high interest rate lies low profitability due to lack of capitalization.
Factors influencing return on deposits
Generating income is the main goal pursued by the client when placing money in a deposit account. The amount of the final amount is influenced by factors such as:
- the amount of investment;
- term of the contract;
- interest rate;
- currency;
- possibility of withdrawal and replenishment;
- availability of capitalization.
The main principle of increasing profitability is placing a larger amount for a longer period. The gradations of amounts from which the interest on main deposits in Sberbank increases are 1000, 100,000 and 400,000 rubles (for the “Manage” deposit 30,000, 100,000 and 400,000 rubles). If the account is opened in a currency other than rubles, then exchange rate fluctuations can also leave an imprint on profitability. The possibility of replenishing the deposit will increase capitalization and, accordingly, income.
Why is the income from the deposit decreasing?
The main goal of banks' financial activities is to make a profit, so they often develop schemes for inattentive depositors. Managers are silent about some pitfalls that prevent them from getting the maximum profit from a bank deposit. Basically, income decreases due to fees for services that are not discussed right away, but they are spelled out in the contract. These may be payments for:
- depositing money into an account;
- deposit account maintenance;
- return of deposit in cash;
- Internet banking, mobile application or SMS service;
- withdrawal of funds from the deposit and interest on the deposit;
- conducting bank deposit transactions;
- withdrawing money from an ATM.
Read the contract carefully before signing it. This will help you avoid additional expenses or imposed services. Careful study of documents before opening a deposit with capitalization will significantly reduce risks and losses.
Deposits with capitalization in Sberbank
Sberbank offers its clients a wide range of deposits. Each of them is unique and has its own special conditions. For status clients, the bank offers a separate line of deposits. The initial investment amount for them starts from 5 million rubles. Let's consider deposits for the mass segment, which, according to the terms of the agreement, have capitalization.
- “Save”, “Save Online”. Minimum amount - 1000 rubles, term - 1-36 months, interest rate - 2.7 - 4.45%, without the possibility of withdrawal and replenishment.
- “Replenish”, “Replenish Online”. Minimum amount - 1000 rubles, term - 3-36 months, interest rate - 3.1 - 4.15%, possibility of replenishment.
- “Manage”, “Manage Online”. Minimum amount - 30,000 rubles, term - 3-36 months, interest rate - 2.7 - 3.65%, possibility of withdrawal and replenishment within the minimum balance.
- "Pension plus" Minimum amount - 1 ruble, term - 36 months, interest rate - 3.5%, possibility of withdrawal and replenishment.
- "Social". Minimum amount - 1 ruble, term - 36 months, interest rate - 3.15%, possibility of withdrawal and replenishment.
- "Gift a life". Minimum amount - 10,000 rubles, term - 12 months, interest rate - 4.5, possibility of withdrawal and replenishment.
On the official website of Sberbank, using a calculator, the client can easily select a suitable deposit for himself (deposit calculator in Sberbank).
Capitalization in Sberbank products
In addition to deposits, Sberbank has other products under the terms of which interest is accrued. For example, the “Social” card. People receiving various social benefits can apply for this card. This could be a pension, unemployment benefits, child care benefits and much more. The card account balance is charged 3.5% per annum. Interest on the balance is calculated daily. And they are credited once a quarter. Subsequently, these interests are added to the balance and capitalized.
The concept of interest capitalization
In some publications we come across the concept of “capitalization of deposits”, somewhere the concept of “capitalization of interest” is used. It should be noted that these are interchangeable concepts. Their essence is the same. In financial articles, capitalization is referred to as compounding. If a bank deposit does not provide for capitalization, then they talk about simple interest. Let's look at the example discussed above. There, income was calculated using the compound interest formula. Now let’s calculate income under the same conditions, but without capitalization, using the simple interest formula. D1 = 100,000 * 6% / 12 = 500 rubles (for the first month); D2 = 100,000 * 6% / 12 = 500 rubles (for the second month). This is how the income for each month is calculated. The annual yield will be: D = 100,000 * 6% = 6,000 rubles.
Definition of capital
In finance, capital is the amount of money an investor needs to invest in an investment or project.
This is not the case in economics. Instead, economists define capital as the equipment needed to organize the production process. It is one of two factors of production (the other is labor).
Thus, if a certain company produces automobiles, the capital of the company will consist of the equipment needed to produce those automobiles, as well as the buildings needed to house the equipment and finished products, warehouses, vehicles such as forklifts and trucks, and any other inventory or installations directly used in the production process.
In addition, company offices, computers, desks, chairs, telephones, intellectual property, and even pens and pencils are part of the company's capital. The only things that are not part of capital are land and labor.
Capitalization in other sectors of the economy
The concept of capitalization is used not only in banking terms. It can be found in combination with words such as companies, stock markets, cryptocurrency. The value of capitalization in each area has its own meaning.
The concept of company capitalization.
Owners of large, medium and small businesses at some point in time think about analyzing the effectiveness of their activities. One of the main factors of efficiency is the assessment of the company's value, in other words, capitalization. It can be determined by:
- company profits;
- market value of securities (stocks, bonds);
- the amount of fixed and working capital.
Capitalization of companies is necessary in case of sale or purchase, merger or integration of business.
Concept of stock market capitalization
The stock market is a platform where the purchase, sale or exchange of securities takes place. The stock market occupies an important niche in the country's economy. It provides additional financial flow through the issue of securities. If we add up the value of all the stocks, bonds and other securities traded on the stock market, we get the capitalization of the stock market.
The concept of cryptocurrency capitalization
Cryptocurrency is a relatively new word in economics. But at the same time it is well-known and loud in investor circles. This is the same currency, only digital, you cannot touch it with your hands. But at the same time, it is equal to real money and has its own exchange rate. The advantage of virtual currency is that it is not tied to real money, and its issue does not require a decision from the Central Bank. It is produced on a network of computer systems through complex mathematical algorithms. Cryptocurrency capitalization is the total value of a certain virtual currency. It is necessary to assess the attractiveness of a particular cryptocurrency. Factors influencing the capitalization of digital money:
- rate;
- the amount of money in circulation;
A currency with a high level of capitalization reacts poorly to market fluctuations. Its rate is growing at a very slow pace (Bitcoin has grown 10 times since 2016). Low capitalization currencies are characterized by high volatility over short periods of time (Ethereum grew 10 times in a week in 2022).
Usage examples on "Secret"
“In my opinion, our capitalization is quite realistic, maybe slightly overestimated, but not much. We work with large, reliable companies and government agencies, which are considered very attractive to any startups creating enterprise software.”
(Slack co-founder Sergey Murashov talks about evaluating the messenger.)
“The current capitalization of Bitcoin, as well as its market share, looks excessive,” says Sergei Smith, managing partner of Advice Finance, financial architect. According to expert forecasts, the first cryptocurrency could quickly depreciate by 30% or more, as has already happened to it.”
(From material about promising cryptocurrencies.)
