Everyone may have harder times in life when they are financially distressed. It is good to be prepared in advance. Many people do not like to live overnight, they are calm when they have some financial reserves. When is the Savings Most Effective? You can get the best out of a savings if you think about your goal.
For example, if you want to set aside money for your child, the Baby Bond might be the best solution. If you want to realize your housing plans, then Home Savings is the best option. If you want to keep your retirement years safe, you might want to consider saving for retirement. If you don’t know exactly what you want to do, but want to put money aside, you can do it with bank deposits, government securities or an investment.
When is the Most Effective Savings?
When it comes to Baby Bond, there are actually two things:
- Start-up allowance and Start-up Account: Children born after December 31, 2005 will have a Start-up account with the Hungarian State Treasury, which will place HUF 42,500 as a start-up allowance. A one-time grant will be given to all newborns with Hungarian citizenship and Hungarian residence. After the age of 18, your child will be eligible for an adult start-up allowance.
- Start Securities Account and Baby Bond: You can also add $ 42,500 to your Start Account by launching a Treasury Start Securities Account. This is a self-funded, completely separate child savings account invested in Baby Bond. The Baby Bond is the security that you purchase by making a payment to the Start Securities Account opened at this Treasury. No other securities can be selected. The Baby Bond will continue to bear interest at 3% above inflation. 10% of the payments are state subsidies, which can be up to HUF 6,000 a year.
It can only be used for residential purposes, but it offers a wide variety of options. Yields can be up to 10% or, very importantly, risk-free. The OBA (National Deposit Insurance Fund) provides coverage for up to 100,000 euros on the deposit amount and interest thereon. It has a maturity of 4, 5, 6, 8, 10 years.
Banks also count it as own funds and can be repaid free of charge on a home loan. The grant amount can be multiplied by entering into a home saving contract for the name of a close relative. If the savings prove to be low, a discounted, fixed-rate home loan can be taken along. Home savings are inherited.
If you are thinking of retirement savings, it is worth distinguishing them from other savings. This is important because retirement savings are longer term and cannot be accessed in the event of an unexpected expense. The minimum duration of retirement savings is 10 years.
If you wish to withdraw your money before the maturity date, it may be expensive. All your retirement savings are free, tax-free, and if you have a declared job, you can claim a 20% tax credit on your payments. Up to $ 1.4 million in annual tax credits.