Financial reserves are the basis for good family or personal finances. Without financial reserves, you have to rely on loans whenever anything goes wrong in the home, when you get sick or your income falls due to your child’s job loss or illness. The financial reserves act as a pillow that protects you from a severe fall into the debt spiral of repeated loans. But how to create them when you haven’t done it yet?
The basis for creating financial reserves is a savings account. This is another bank account, separate from your current account. It usually offers higher interest rates than a current account. And you can have it with a completely different bank than your current current account.
Savings account money is available anytime, you can touch it when you need it. But by being separated from the current account, money is not spent as headlessly as it is from the current account. We recommend transferring some of the money right after the payout.
And if you need money, transfer back to your current account just what you really need. Keeping a savings account is usually free. The 15% tax is paid on the appreciation (on the credited interest) and is deducted directly by the bank.
The term deposit is for a predetermined term. So you put here a lot of money at once (for example from a savings account) for a year or even ten years. For the entire duration of the deposit you will not touch them, at the end you will get deposited money and even their appreciation, which is higher than the savings account.
Should you necessarily need this money during the term of the deposit, it can of course be withdrawn, but under penalty for early termination of the contract. This motivates you not to really touch the money. The appreciation also pays 15% income tax.
As a result, state support is a good appreciation of money in building savings. However, it pays to give a maximum of 20 thousand per year. No more and no less (due to account maintenance fees and low interest rate, the appreciation here is really only the state contribution, which is limited to twenty thousand).
The contract lasts for six years and after the end of the contract you will receive savings, state support and appreciation, of course minus the account maintenance fee and 15% tax.
Another product with state support is supplementary pension insurance. You deposit money at least three hundred crowns a month, your employer can also deposit money here. State support is based on the amount of your deposit. The contract lasts up to 60 years, sometimes longer. After 15 years it is usually possible to withdraw half of the saved money – this is called a retirement pension.
When the contract expires, you can have the money paid out at once or several times, depending on the contract you have concluded. With supplementary pension insurance, you can switch between funds and also change investment strategies, from conservative to dynamic.
Government bonds are quite a new option for investing individuals. For example, anti-inflationary and reinvestment bonds are now on offer. Each one promises a different appreciation.
The reinvestment bond is valued at a predetermined amount, which increases with the number of years of the deposit. It is six years overall and each year the yield is higher. The anti-inflationary bond promises a yield of inflation plus half a percent to it. He is also six years old.
The braver of you can invest in mutual funds or stocks. It is always a long-term investment that develops abruptly, both up and down. In the long run, however, the appreciation of mutual funds has been developing positively. The money is usually available within two months of the request for payment.
You can invest from several hundred crowns a month. Regular deposits are recommended to eliminate these fluctuations. And if you do not collect more than 100,000 crowns for three years, the income from this investment will be completely exempt from income tax later. Mutual funds may be invested through banks that retain part of their profits. However, you can also directly through the investment company.
Real estate funds
For example, a real estate fund is a regular and constant return investment. It is only necessary to deposit more money at once. For example, those who come out of building savings after six years. Even investment funds tend to have a longer duration, they usually issue you a bond for 5 – 10 years, so they are similar to a term deposit, but offer higher appreciation.
Again, if you do not collect over 100,000 crowns for three years, the income from this investment will be completely exempt from income tax later. Real estate funds can be invested through banks that retain part of their profits. However, you can also directly through the investment company.
What about investment gold?
Investment gold has the great advantage of not paying taxes, even during the first three years of the investment. Investing is anonymous, you buy gold bars that you can have at home or stored in a bank safe or refinery directly. Back to money, gold can be exchanged within a few days.
But beware, it is not worth buying in the e-shop, there is no guarantee of redemption at all. It is better to deal directly with an exclusive broker or to shop in a refinery. Here too, it is a long-term investment, and the price of gold is rising gradually, of course, with irregular fluctuations that equalize the long-term perspective.