Where to invest the hryvnia?
You have accumulated 100 thousand hryvnias, but you do not know what to do with them next? Any financier will say that money should not be idle, it should bring income, not dust under the mattress. Many people find themselves in a similar situation and do not know where best to invest their savings.
Where to invest the hryvnia? The answer to this question is of interest to many Ukrainians, because now they can use several ways of investing, each of which has its advantages and disadvantages. By comparing them, each user will be able to choose the appropriate option that corresponds to his accumulation.
Where to invest money on deposit?
This investment option is considered one of the most popular among compatriots, especially when it comes to a small amount. Its meaning is very simple, you trust the bank’s funds for a while, he uses them and then returns with interest. Despite the fact that everything is so simple, deposits have certain subtleties and strategies. Experienced depositors look for profitable deposits to then give them money. First, a small amount is paid into the account, thus fixing the interest, and then after the expiration of another deposit replenish the open for a larger amount.
The basic principle of the deposit is clear to everyone, even those who do not have financial education. The bank pays you for allowing you to use your finances. Depending on the term of the deposit, the interest rate may vary. A deposit in the bank is a good option for investing 100 thousand hryvnias, because as a result you will get a good income, and the money will freeze for a short time.
The advantages of this type of investment include:
- investing money with a guarantee. The Deposit Guarantee Fund provides a return guarantee of up to UAH 200,000.;
- simplicity and accessibility. This does not require special knowledge in the field of finance;
- profitability on it is known in advance, so it is easy to calculate;
- the depositor can choose the banking institution and the deposit.
Many believe that deposits have no drawbacks. However, in reality this is not the case. Deposits in hryvnia have 2 main disadvantages. The first is inflation, which literally “devours” the profitability of the project, the second – the tax on “earnings”
Most novice investors want to find a secure investment. Therefore, bank metals are chosen for investment. As a rule, preference is given to the traditional yellow metal – gold. Also today, banks provide the public with the opportunity to open a deposit in metals.
How to invest properly? Officially, customers can buy gold bars weighing 1 gram. up to 1 kg. The heavier the ingot, the cheaper it will be 1 gram. gold. For example, if you want to buy 100 grams. gold in a jar, it is better to buy 1 ingot than a few small ones. The difference in the cost of 1 gram can be 2-5%.
To date, there are 2 types of “gold” bank deposits, which differ from each other in that the first is directly related to the physical stock of precious metals, and the second opens without it. Delivery means that you buy metal from a bank and “put” it on deposit, or bring your ingots “from home”. At the end of the deposit period, the bank will refund your deposit and commission in ingots less or in UAH. current course.
If you choose the second option “without delivery”, all transactions will be carried out only in cash. The required amount will need to be paid into the bank, it will be transferred to virtual gold and credited to the deposit. When the term of the deposit expires, the procedure will be repeated, but only in reverse order – gold together with accrued interest is converted into national currency, then the funds will be issued from the box office.
The amount of 100 thousand hryvnias will be enough to purchase 4 gold bars weighing 20 grams and open a bank deposit at 3% per annum.
One of the main advantages of this method is that metals are reliable and liquid assets. Unlike currency, the metal is not tied to the economy of any country, for investors it is a “quiet haven” in any situation. Demand for gold usually grows during the crisis, and with it grow and its quotations. In 2020, the value of a troy ounce of gold was 1562 US dollars, which is 18% more than in 2019.
The disadvantages of this option outweigh the advantages. These include low profitability and the hassle of “working” with physical gold. Its storage in the center will lead to costs that can amount to several thousand hryvnias per year. It is dangerous to leave him at home. In addition, the metal requires careful treatment, as damage in the form of scratches will affect its value, in particular, significantly reduce it. Another disadvantage of this method is that they are not protected by the DGF.
Investing in real estate: is there a profit?
Many people today are investing in real estate, hoping to secure a stable extra income. For example, you can buy a property and then rent it out. If you are in no hurry, you can invest in the “Pit” and buy an apartment cheaper by 30%. Buying a 1-bedroom apartment in the capital, you can safely rent it for 7-10 thousand hryvnia per month. And here the annual return on investment will be 8-9% per year. However, savings of 100 thousand hryvnias will not be enough to take advantage of this solution. One room in the capital costs at least 35-40 thousand dollars, in the regions it can be purchased for 10-20 thousand dollars.
Read also: When did the Ukrainian hryvnia appear?
The advantages of this option include its simplicity. You buy an asset that brings in a steady monthly income. Real estate is also a liquid asset, which means that you can sell it at any time at market value, as demand for it in Ukraine is still quite high.
The disadvantages of this method of investing are that it has a high entry threshold. In other words, the investment will require a large sum, and the money can go not only to purchase but also to repair. Also, if you urgently need funds for other purposes, you will not be able to sell them quickly.
Where to invest money at a high interest rate with a guarantee?
Government bonds are government securities placed by the Ministry of Finance on the domestic market of Ukraine. Thanks to them, the state receives finance from investors – individuals and companies to cover their needs, then after a certain period of time returns them with interest to the investor.
The use of this investment tool is interesting for some reasons. First, the state guarantees the full return of these securities. Secondly, the income from bonds is not taxed, which means that the investor will pay only 1.5% of the amount (military fee). The yield on bonds in the national currency may be equal to or higher than the discount rate set by the National Bank of Ukraine. Today it is 18% per annum, such conditions do not exist in any commercial bank. If necessary, the investor can sell his assets on the secondary market at any time.
IGLBs also have shortcomings. For example, they are accompanied by additional costs. To purchase them, you will need to open a bank account and custodian, as well as pay broker commissions and more. For investments to be beneficial, they must be large, namely from 1 million hryvnias. With small amounts, it is better not to get involved in this prank, because the costs will exceed the income. Thus, this option is not suitable for 100 thousand hryvnia.
Today there is another way to invest interest in Ukraine. This is p2p lending. This method is a mechanism for receiving money from individuals on special online services. Its meaning is that people lend money to each other or to companies, bypassing financial institutions.
This method is considered quite young for Ukraine, now there are only 5 sites where an investor can “earn” by offering their funds to borrowers. The amount of loans is 5000-500000 UAH. With the amount of 100 thousand hryvnias you can try yourself as a lender. This option is considered probably the most profitable of those we mentioned earlier. An investor engaged in such activities may receive a return of 20-35% of the amount of investment.
Also, this promising method has its drawbacks. Where there is a large income, high risks. This has always been the case, and this method is no exception, as these are unsecured loans and you decide to issue them. There are platforms that help collect debts, but their actions are limited to reminding borrowers of debt.
You can try to invest your savings in foreign currency, you can buy them in a bank or with the help of brokerage companies. The US dollar, the euro, the British pound sterling, the yen and the Swiss franc are especially popular. You can try your hand for 100 thousand hryvnias.
If you have an idea of how the course changes and what factors cause fluctuations, you can easily earn income from its jumps in one direction or another. In addition, by saving money in foreign currency, you can protect your capital from inflation. Another advantage of the currency is its liquidity. The disadvantage of this method is that now the exchange rate is unpredictable, and inflation is observed in all economies of the world.