Guide

Put 500 rubles in a bank for a year — how much will you earn?

How can you make your money generate income? This question arises when you have some free money without specific plans for it. Let’s say you have 500 rubles — that’s not enough for an exotic trip. We decided to find out what passive income these funds could generate if you deposited them in a bank and opened a deposit account, but in a way that wouldn’t require you to wait too long for profit. It’s also ideal to eliminate the temptation to spend them, so we’re focusing on non-redeemable deposits. We explain what conditions banks are currently offering for such short-term deposits and how much you can earn by putting money in for the maximum term.

What is this article about?

What are short-term deposits?

Deposits can be divided into short-term and long-term based on their duration. The former cover a short period of time, most often deposits from 1 month to a year. For the investor, the noticeable difference is that short-term deposits allow you to get back your money faster, while the interest on the deposit is often lower.

In the case of long-term deposits, the bank gets the opportunity to use the investor’s money for a longer period of time, and the rates for them are usually higher than for short-term deposits.

What is the difference between non-redeemable and redeemable deposits?

A redeemable bank deposit can be withdrawn (i.e., recalled) before the end of the deposit term. The money that is on a non-redeemable deposit remains in the bank for the entire period, and it can only be withdrawn early in emergency cases — usually such cases are indicated in the contract.

As a rule, the interest rates on non-redeemable deposits are higher than on redeemable deposits.

By offering a higher rate, the bank encourages consumers to open non-redeemable deposits and leave their money at the bank’s disposal for a fixed period of time. Also, some banks offer the possibility to partially withdraw accrued interest.

What if I want a deposit in a foreign currency?

Such deposits also exist in Belarusian banks — you can find options in dollars, euros, Russian rubles, and Chinese yuan. Of these four currencies, the rates for dollars and euros are the lowest — they can reach up to 0.001%. For example, you can find such options in Belarusbank:

• non-redeemable deposit in dollars for 13 months — rate up to 0.001% per annum
• non-redeemable deposit in euros — rate up to 0.01% per annum

The highest interest rate on dollar deposits we noticed was in BelVEB Bank — up to 2.3% per annum (urgent non-redeemable deposit in US dollars)

Do you need to pay tax on deposit income? """

""" No, if a deposit in Belarusian rubles is held for more than a year, a 13% income tax is not applied to such deposits. However, if the deposit is held for a shorter period, the profits are subject to income tax. Fortunately, depositors don’t need to visit the tax office; the bank will handle the tax deduction and payment if necessary.

Here’s how the tax is calculated: 25 rubles × 0.13 = 3.25 rubles.

The tax payable amounts to 3.25 rubles. The depositor will receive a net income of 21.75 rubles. After accounting for the tax paid, the effective interest rate is 8.7% per annum. As a result, the actual yield decreases by 1.3 percentage points in this scenario.

This calculation applies to a non-revocable deposit with interest paid at the end of the term (without monthly capitalization).

Short-term deposits (32 to 95 days):

• 32 days — MTbank — MTbelki — 1%, fixed — 0.37 rubles
• 32 days — MTbank — MTbelki online — 2%, variable — 0.76 rubles
• 35 days — Dabrabyt — Tsudovny — 0.5%, fixed — 1.8 kopecks
• 35 days — Dabrabyt — Dobry mesyats — 0.5%, fixed — 1.8 kopecks
• 35 days — Neo Bank Asia — Neo Non-Revocable Online — 3.3%, fixed — 1.38 rubles
• 35 days — Paritetbank — Non-Revocable Online in BYN — 3.1%, fixed — 1.29 rubles
• From 35 days — BelVEB Bank — Non-revocable deposit in Belarusian rubles — up to 14.3% (depending on deposit term and amount) — 2.58 rubles (at a rate of 6.1%)
• From 35 days — Tsenter Bank — Tsenter 35 online — 3.2%, fixed — 1.33 rubles
• 35 days — RRB Bank — RRB BYN online 1+ — 4.5%, fixed — 1.88 rubles
• 60 days — Alfa Bank — Alfa Deposit (non-revocable) — up to 4%, fixed and variable — 2.86 rubles
• 61 days — Sber Bank — Non-revocable deposit "Save" — 5.4%, fixed — 3.93 rubles
• 3 months — Neo Bank Asia — Neo Non-Revocable Online — 6.5%, fixed — 6.97 rubles

These conditions were valid at the time of publication. The calculations are approximate and do not obligate banks to pay the specified deposit income. """