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Savings enable us to feel safe and be on firm ground, be able to reach our goals, go travelling, buy things, equip our children with a good education. Even if something extraordinary happens, saved money will help to meet challenges. Another important question is where saved money should be kept until we need it. How can we derive maximum income with minimum risk? Some people accumulate money on savings deposits; others purchase precious metals or shares. Which of the modes will fit you? Much depends on our purposes, aspirations, desires.

To choose own investment strategy, a man should answer several questions:

1. For what purpose do you wish to invest your money? Do you need to accumulate money for purchase of an apartment or travelling or purchase of a car or making pension savings or saving money for the future of your children, or do you simply possess excess money?
2. For what term are you ready to invest your money? Invest your money in instruments and institutes only if you expressly understand for what time you are ready to part with your money and what is of paramount priority for you: safety guarantee or high yield opportunity.
3. To what extent are you ready to venture your money? When investing, consider currency and market risks and remember that no deposits can give full guarantees.
4. What is the amount of your investment? It may be that you have unexpectedly come into possession of a certain sum (prize or inheritance) and wish to dispose of the same correctly; or you wish to start with monthly saving.

After you answer these questions, you will be able to choose the optimum mode of investment. So, let’s give a summary of what we have told down about savings instruments.

Bank deposit – is a traditional safe mode of keeping money. Any bank is ready to offer a variety of deposits to its customers. How to choose what fits you? If your purpose is to derive income, you need to make a fixed-term deposit with a bank. Fixed-term deposits are called so because they provide for a limited fixed period of depositing. If you want to have a possibility to withdraw a required sum at any time, you should choose call deposit. The first and probably main criterion for many customers is the interest rate offered by the bank. Due date for interest – monthly or quarterly or at maturity payments – is of no less importance. To control risks arising from fluctuation in exchange rates, you may set up more than one account in different currencies. Moreover, there is an opportunity to set up a multi-currency account. Minimum risk is a great advantage of bank deposits.

Investment in bank-managed funds (BMF) is also highly reliable. With a small sum of money you will get all advantages of a big player in the financial market. One should only choose the fund according to expected return and allowable risk. The fact, that customers’ income (profit) derived from membership in the bank-managed fund is not deemed an item of taxation, is an advantage.

To diversify investment portfolio, one can invest in precious metals. But it should be kept in mind that investment in precious metals is mainly a long-term investment instrument. In case of long-term investment gold rises in value much more than all principal currencies.

Despite of the fact that shares and bonds are united under the common name “securities”, shares are deemed a more risk-bearing instrument as compared to bonds. Investment in bonds has sufficiently low degree of risk. Moreover, it can be rated practically to zero if investment is made in government bonds. However, easy interest rates will be a peculiar no-risk payment.

Investment in shares can bring high income within a short period. For investment in shares, income can be derived from payment of dividends or change in the market price per share. But high yield involves high risk. Dramatic increases and landings are the main features of such market.

Savings cards afford their owners an opportunity to run own finance most flexibly. The customer reserves the right to withdraw full saved amount at any convenient time.

It should be taken into account that such convenient mode of savings is associated with charging of interest at a lower rate as compared to other bank’s deposit products. Possibility to be free-and-easy with own money will suit to those who are ready to sacrifice yield, but have own money at fingertips at any time.

You can become a successful and prosperous person due to investment, if you make informed decisions and act consistently without letting your emotions run away with you. Be in no haste to invest according to your friends’ advices; apply your knowledge gained from special literature, improve your financial competence.

Purchase of securities is another way to save and increase one’s savings, similar, for example, to bank deposit. Shares and bonds are generally understood by the common name of securities; through more compound instruments for professionals exist. Investment in securities is a subject to study. It requires learning just as any other profession or knowledge. If you learn to invest, you will be able both to save and make much of your investment.

A share is a security which gives its holder the right to participate in the company management, and provides an opportunity to be distributed a portion of the company’s profit. A share is a security which certifies the investor’s share in the capital of the company. When you buy a share of any enterprise, you become one of its shareholders. A portion of profit distributed to shareholders is called the dividends. When investing in shares, benefits can also be derived from change in market price per share. In other words, if an enterprise operates successfully, the value of shares increases. Investment in shares is a sufficiently risky venture. With this in mind, one should refrain from investing last money, but invest only idle money to take chances. Investment in shares can bring high income within a short period. But high yield involves high risk.

There are ordinary shares and preference shares. An ordinary share is a security which certifies its holder’s right to a portion of assets of the joint stock company in case of its dissolution. Such share entitles its holder to be distributed a portion of the company’s profit in the form of dividends and to participate in the company management. A preference share is a security which gives its holder the right to be paid dividends at fixed interest rate, the right to a portion of the company’s assets in case of its dissolution, but is does not give the right to take part in the company management.

A bond is a debt security which certifies obligation of its emitting company to pay a certain amount to holders of such bonds at a set date (unless otherwise provided for by the terms of issue). In other words, this is an obligation of the company stating that at maturity of a bond its holder will be paid back the amount for which he has bought such bond, and also will be paid fixed income in the form of accrued interest.

Shares are deemed a more risk-bearing instrument as compared to bonds. Investment in bonds has sufficiently low degree of risk. Moreover, it can be rated practically to zero if investment is made in government bonds. However, easy interest rates will be a peculiar no-risk payment.

In contrast to shares, bonds do not turn their holder to co-owner of the enterprise. But they turn such holder to a creditor to whom the enterprise is down. Even if such enterprise becomes bankrupt, it will have to repay its debts. Such debts will be repaid by the co-owners (shareholders) who will receive their money only after such debts are repaid. So, you will derive profit even in such situation.

Securities are divided by form of issuance as follows: certificated and uncertificated; issue-grade and non-equity; registered, bearer, and order securities. Liquidity, i.e. ability of assets to be quickly sold at the price close to the market one, is of special importance at the market. In practical terms marketable, low liquid and non-marketable securities are distinguished. The easier and quicker total value of assets can be received, the more liquid such assets are.

The Belarusian security market is represented by the following main instruments:

• government securities – government short-term and long-term bonds;
• short-term bonds of the National Bank of the Republic of Belarus;
• corporate securities (shares and bonds);
• municipal securities (bonds of local regulatory and executive authorities);
• bank certificates;
• “Property” registered privatization vouchers.

As for the government issue-grade securities, they include government short-term bonds maturing in no longer than a year, and government long-term bonds maturing in a year and more. Government securities entitle their holders to receive par value of their bonds and interest income to maturity in the form of percentage earnest. Government securities are generally uncertificated and exist in the form of book entries.

Securities of the National Bank of the Republic of Belarus are represented with short-term bonds denominated in Belarusian rubles. Such securities are issued for more efficient execution by the National Bank of its respective duties. Short-term bonds of the National Bank of the Republic of Belarus are placed on paperless basis in the form of book entries for the period from 10 to 90 days.

Gold is a precious metal, which natural properties such as reagent resistance, uniformity, strength, durability, divisibility, high value of a small volume make it most suitable for money.

After paper money had appeared, most of it was pegged to gold, but the government abandoned such pegging step-by-step, and national money became more exposed to inflation and change in purchasing power. History knows a crop of examples when quantity of goods bought for gold bullion was the same as hundreds and even as much as a thousand years ago. Gold is an insurance asset for the world largest central banks, and purchase of gold has become a widely accepted mode of investment. In case of global threats such as world financial and economic crisis and other shocks gold provides an opportunity to save and increase one’s savings. Sufficiently high protection from inflation is the main advantage of investment in gold. The precious metal is a most stable asset, which fact in turn contributes to formation of its positive pricing environment in the market.

Since 2001 on, i.e. within the recent 10 years, the price of gold has grown by more than five times. There exists increasing demand for gold from the part of both professional players of the precious metals market and natural persons who are willing to change a portion of their savings for gold.

A matter of choice of time of investment in gold is by no means unimportant. Prices for gold in the world market continue their midrange adjustment after last year’s peak. According to analysis of gold price trends, this process will most likely continue.

In all cases, gold and other precious metals should be considered as a long-term investment for the period of at least 2 or 3 years.

Being hard assets, precious metals are traded predominantly by the banking institutions in the form of small bars and investment coins.

Small bars of precious metals (gold, silver, platinum) may be purchased and sold in the branches of the National Bank of the Republic of Belarus, and also in the banks of the Republic of Belarus granted licenses (permits) to trade in precious metals. Prices for purchase and sale of precious metals in the form of small bars fixed by the National Bank are available on the web-site www.nbrb.by.

Trade in precious metals with placement thereof to unalocated bullion accounts is an alternative to investment in precious metals in the form of small bars.

An unallocated bullion account is a metal account destined for recording gold, silver, platinum, and palladium in the form of small bars without indication of their identifying details.

Unallocated bullion accounts have the following advantages:

opportunity to save and increase one’s savings due to rise in value of precious metals;

opportunity to diversify one’s investment portfolio by investment in precious metals, so reducing the risk of loss related to adverse changes in the financial markets;

accessibility – free opening and operating an account;

high liquidity – sale of metals from the account in depersonalized form, performed by the bank on the date of customer’s addressing the bank;

value of depersonalized precious metals is free of expenses related to small bar production, storage and transportation.

The banks fix prices for purchase and sale of precious metals in Belarusian roubles and US dollars on a daily basis, taking account of price quotations in the international precious metals market.

Therefore, there are various modes of investment in precious metals, and such investments are sufficiently flexible in relation to investment strategy and investor’s preferences in terms of risks and yield.

Apart from investment function, precious metals have a status of a conventional product and are used in different branches of industry: instrument engineering, machinery manufacturing, medicine, gold-work (such use is typical of all precious metals, though degree of utilization of different metals varies). It means that all metals have their real value and are a promising and risk-free asset.