How to store long-term savings in Russia?

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

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What options for storing long-term savings are possible in Russia and how do they work (besides investing)?

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In Russia, there are not so many options for storing savings, if you do not go to the stock market. In fact, there is only one such banking instrument - a deposit. According to calculators, now in 34 banks in Russia it can be opened for a period of 5 years. The maximum rate is 6%.

However, it is not always profitable to open deposits for such a long period. For example, in 2014, when deposit rates were at a historical maximum, it made sense to do this (preferably with the possibility of replenishment) in order to fix a profitable rate for yourself. But now the profitability of deposits, on the contrary, tends to a minimum, and it is unprofitable to open such deposits. We just don't know what will happen with the rates in the next five years.

There is another more everyday way to protect savings from depreciation - to keep them in three currencies (ruble, dollar and euro in a ratio of 40-30-30). In this case, you may not earn anything, but you certainly will not lose money due to inflation. If you choose this method, then I recommend transferring money into foreign currency from each salary.

An example from my own experience shows that this tactic works well. My grandfather kept all his savings in dollars since the 1990s. Therefore, he met all crises - from the default of 1998 to the fall of the ruble in March 2020 - calmly.

In general, investments in the stock market are still more suitable for long-term storage of savings. In a 10-15 year perspective, they generate income.

So, in 2019, economists calculated the return on investment in the MICEX Index, what kind of return the Moscow Exchange Index brought (it includes the most expensive and popular Russian public companies like Sberbank and Gazprom). It turned out that over 15 years it was 967%, and the yield of the American S&P 500 index for the same period was 913%.

The main rule for those who want to save and increase their money is to use different tools. Most of it can be kept on deposit, and 20-30% can be invested.