Simple and structured term deposits are financial investment options for Portuguese consumers. Their main objective is to prevent inflation from consuming money.

Therefore, it is possible to protect the amount and avoid losses throughout the year. In other words, at the end of a period of time, if the money is invested in a deposit of this type, it will still buy the same items (and not less).

But, if you're a little confused about how this works, don't worry. See below what each operation is and what their differences are. Afterwards, you will even know which one to choose from the options!

Consider, for example, that you have 200 Euros that would be earmarked for a specific purpose. However, you decide to postpone the purchase. There is no guarantee that next year, however, its value will be worth as much as it is now.

The most common thing, in fact, is that not only is the value of the good higher, but also that your money no longer has as much strength: that's how inflation works, right? It is what regulates the purchasing power of money.

And this is exactly where the term deposit comes into the picture. With it, you apply an amount for a fixed period. In the end, you receive the value and also a remuneration on it, as if this amount compensated for inflation.

However, an important point to highlight is that money cannot be moved during the pre-determined period, is that ok? And that is exactly why the institution pays you.

In this case, there is at least a guarantee that the value will be maintained. In other words, it will not be affected by inflation. Furthermore, it is possible that you will receive an additional payment, which can help you with your finances, including.

In fact, the system that protects deposits in Portugal corresponds to the Deposit Guarantee Fund (FGD), regulated by the General Regime of Credit Institutions and Financial Companies (RGICSF). 

This system, therefore, guarantees that, even if the bank where you made the term deposits becomes insolvent, you will not lose the amount you deposited.

But, remember that the guarantee only refers to the possibility of recovering your money without it losing purchasing power to inflation, okay? There is no guarantee of receiving remuneration in the event of bank insolvency.

In simple deposits, the remuneration follows a fixed or variable interest rate. This way, when the deposit matures, you will receive what you deposited plus an amount related to interest.

Furthermore, this is an operation that has no financial risk of loss. Here, you immediately know when and how much you will receive. Therefore, it can be a good choice for conservative investors who do not want to take risks.

On the other hand, precisely because it is a limited risk operation, this type of term deposit also has lower interest rates than the other type. So, you will need to think carefully and choose!

One of the main precautions with any financial operation, such as investment or contracting credit, is the analysis of the Standardized Information Sheet (FIN).

And FIN continues to be important even when we are talking about simple term deposits. This happens because it establishes all the details of the operation.

Therefore, it is through this document that you can find out about the income you will receive. Also, about the date of receipt, minimum and maximum amounts and movement of funds.

Another important detail that you should know before looking for one of the types of term deposits is that you will have to pay IRS of 28% on the interest applicable to them. 

Therefore, even if you have deposit income information at the start of the transaction, use the Net Nominal Annual Rate (TANL) and not the Nominal Annual Rate (TAN). After all, the first already considers the necessary discounts.

In this case, the remuneration of the amount deposited depends on more factors. For example, these operations may be associated with the evolution of other financial instruments.

Therefore, in this case the investment remuneration is only calculated at the end of the operation period. This is why the consumer is not sure what value he will receive.

The amount may include the original value and without inflationary losses, as well as remuneration. However, there is no guarantee that the remuneration will actually be applied and possible.

Therefore, this is an operation that presents risks to the consumer. On the other hand, precisely because of this, it can generate a higher return than simple term deposits.

This depends on the profile of each consumer. For example, are you an investor who accepts more or less risk? If you are more liberal, structured deposits can be good options.

For the most conservative, on the other hand, simple deposits are better. But not only that. You should also analyze the specific conditions that are offered by each banking institution.

Also, general market conditions. Another point that deserves your reflection refers to the time in which money will be out of your reach. After all, this type of term deposit depends on it.

Therefore, you must have other reserves that you have access to in case of financial emergencies before opting for simple and structured term deposits, agreed?

The main objective of term deposits, whether simple or structured, is to prevent your money from being lost due to inflation. In addition, they can also bring remuneration.

Even so, there are several investment options on the market that allow this income and growth in the amount. So why not learn more about it? Access the link below and get started!