How to save and grow your money?

The economic situation in the country is predicted to be quite stable, and many people have already become accustomed to multiplying their savings through financial instruments that are popular in the world. Kyrgyz people have started to keep their savings in banks more often and receive passive income. This is a simple and understandable instrument that has guaranteed profitability.

But how to make money bring income correctly and efficiently? Atakishieva Zemfira, Chairperson of the Board of Bank of Asia, told about it.

- People have begun to realize that keeping money under the mattress is unprofitable and money should work. What tools do banks offer for this purpose?

 - The process of accumulation, strange as it may seem, is one of the main criteria of success. You need to save money, and you can do it in different ways. Even if we earn good money, everyone has their own needs, expenses, and desires. Others spend their money on education and traveling. But today there are new financial products that are little known and have a lot of volatility, such as cryptocurrencies.

 No matter how hard it is for you, you should always try to save and use understandable banking instruments such as deposits or deposits.

- Is there any difference between a deposit and a deposit?

 - The very definition of a deposit came from the Soviet times, but now it is all called deposits. They come in two main types – demand and time deposits.

Banks now offer deposits with a rate of 15-17% per annum. The main disadvantage of a high interest deposit is that the money cannot be used for a certain period. But there are other types of deposits, when there is interest on the account balance. Of course, the offered rates are lower there, but savings can be taken away at any time without losses. In this case, accrual on the balance is made monthly. There is an effect of capitalization – interest is added to the principal amount. It seems to be a little, but in the long term, the final result is a solid sum, because the income grows in a stable progression. Capitalization is a good tool for long-term deposits.

Very often criticized is the fact that savings are kept in the national currency, and not in foreign currency, because foreign currency is more trustworthy. But we should pay attention to the fact that the rate on KGS deposits is much higher.

And we see a tendency to increase KGS savings, as our currency has devalued least of all recently, compared to other currencies in the post-Soviet space. In addition, the return of deposits up to 1 million KGS is guaranteed by the state through the Deposit Protection Agency.

- How to choose the best deposit option for a person without financial education? After all, each stratum of population has different level of income and its inflow?

- It is necessary to study what instruments are offered in the market by commercial banks, microcredit organizations, Kyrgyz Stock Exchange. What are the types of deposits, bonds, their terms, rates and conditions. Make a comparative analysis. You should not invest all your funds in one product or bank. There is a saying: "eggs are kept in different baskets". But first of all, it is necessary to define the goal - to buy something or to save for a down payment on a mortgage, for children's education or for traveling? Having defined the goal, it is easier to make a decision, as you will understand under what conditions you will be able to save the necessary amount of money.

"It is necessary to cultivate a culture of hoarding. Accumulation is a person's ability to restrain his impulses. Learning to save is a feat. It is much easier to save when you have a certain goal and start saving for it.

- Everyone thinks that to get effective profit one should start with a large amount - 10-30 thousand KGS or even USD. But there are deposits where the minimum deposit amount is from 500 KGS. How to understand it?

- Millionaires say that the most difficult thing is to earn the first money and learn self-discipline. Everything starts with the first step, and deposits give such an opportunity.

- Do deposits help you develop your wealth further through other financial instruments? For example, through the purchase of securities?

- The financial sector offers different types of savings. We have such instruments offered by the Kyrgyz Stock Exchange and banks. Today the stock exchange presents bonds of local companies, including microcredit companies and banks. There are also government securities.

You can always find a favorable option for yourself and start learning how to save and multiply your money.

- In each specific case, you need to count and understand the advantages of an effective interest rate. Money today and tomorrow have a different value. And answer for yourself the main question: what is more profitable for me to do today?

It is necessary to take into account all variables to solve the question, and the truth is somewhere in the middle. Bankers will help you calculate and make the best choice. But you should also have a minimum of financial knowledge. What do you want in the long run? And are you ready to overpay interest now or, on the contrary, will you save? And back to the definition of the goal: for what and when? Quickly and now, then a loan is more likely to be suitable. If not, then it is better to engage in multiplying savings.

- Today, loans are becoming more accessible. How can we teach people to use this financial instrument wisely?

- A few years ago, there was a popular loan, which was advertised at a low for that time rate of 15-17% with its efficiency of 28-32%. There, the interest payments on the original principal debt were counted non-standardly. Ask managers for terms, conditions and other important terms of the loans. Read the terms and conditions carefully before signing the documents. Banks are obliged to indicate the effective interest rate in the contract – it is calculated not only taking into account the interest, but also your other costs of obtaining the loan.

- What is the peculiarity of the loan product from Bank of Asia CJSC?

- Our advantage is in service, and we are trying to issue loans faster by reducing bureaucracy. We have launched a new online product "Goods in installments" and have already issued more than 10 thousand loans for 300 million KGS through partner stores. We consider this product a success. It is used both in Bishkek and in the regions.

 - Digitalization is constantly present in our lives. Is the bank keeping up with it?

 - We are now moving to a new level of digitalization. We are completely replacing our ABS, launching a new mobile application and internet banking. We are doing this in order to be ready for new challenges.

New digital products are also being developed and will be introduced soon. There will be online loans and deposits. But traditional service delivery remains. When you first make a deposit, we recommend visiting a bank office to get comprehensive advice on all the products and services you are interested in. You will also be taught how to use them through the online application. And then you can use all the possibilities of digitalization - manage your money online.