Bank deposit, currency, bonds or P2P-lending – how is it more profitable to use not too much free money?

Let’s say you got an inheritance, sold an apartment in the suburbs or you just got free 10-15 thousand euros. How to properly use this money, so that they “work” for you?

There is an opinion that any investments require serious investments, as well as very risque for those who do not professionally engage in them. In most cases this is not the case. For private investors-beginners, a number of instruments are now available, which are covered by the state or bank, tax deductions and guarantees.

Bank deposit

The simplest and most conservative investment is, of course, a bank deposit.

Reliable banks with a wide network of branches and ATMs offer not very high rates, but give a high guarantee of safety of your savings. In case of problems with the bank, the state will pay depositors the full amount of the deposit. The only thing you need to pay attention to is whether your bank is on the list of organizations that make up the deposit insurance system.

So, one of the most attractive rates for a deposit with interest capitalization and the possibility of partial withdrawal and replenishment of funds is offered by Globex Bank (an example of the Universal Deposit or Universal Online) – 8-8.15% per annum, with an investment of 1 million for a period of 1 year. It is worth noting that most banks offer a higher rate on condition of opening a deposit in the Internet bank: for example, the “Universal” deposit from TCB Bank assumes a rate of 6.53% per annum, while the “Online Universal” deposit in the same bank already guarantees rate at 6.78% per annum.

Some banks offer special bonuses and privileges for new customers. An average-class audience (available funds of about 10K euros) is one of the most desired for any bank: economically active, with a high level of consumption, is susceptible to any products – from loans to investments, provides good “average checks”. In this regard, many banks offer privileged products to clients of this category: profitable currency exchange, bonus card, personal manager, foreign travelers, free cash withdrawals at any ATMs, reduced interest on consumer loans, etc.

Also, banks offer customers who have available funds, various combined investment products: the program of investment life insurance for a period of 2 to 4 years, an individual savings and investment portfolio, etc.

If the client has an official income that is subject to personal income tax, then it is recommended to pay 20-30% of the specified amount to buy bonds.

Individual Investment Account

The second option for a novice investor is an individual investment account. Having opened it in any management company, you can buy securities and other products. With the advent of IIS, management companies began actively offering ready-made strategies with an explanation of what can be bought into an account, what income to receive and what risks to avoid.

In general, the strategies of management companies suggest three possible assets for investments. The most risky is the stock market, so investors are immediately warned that before you chase profitability, you need to consider all the possible consequences and be prepared to lose part of the income in the event of an unfavorable market situation. More stable and at the same time profitable will be corporate bonds. Government bonds are the most secure investment.

In the current unstable situation, it is recommended to choose only liquid assets in order to be able to react quickly to external events. Preference should be given, first of all, to liquid bonds, shares and ETF, rather than structural products or illiquid securities. If passive income is important to you – lay emphasis on bonds and dividend stocks.


In the period of volatility in financial markets, profitable investments in foreign currency can become profitable. Buy the currency best from the brokerage account in the currency section of the exchange, that is, at a market rate and without overpaying banks. In this case, you can “quickly track and use the best course here and now.”

You can store currency in several ways. For example, in the form of cash. In this case, there is no risk of converting funds at a bad exchange rate. The fact is that when the bank stops operating, the state returns the funds to customers, converting the currency at the exchange rate at the date of the license revocation. Therefore, if you store the currency in the bank, you can lose profit because of this operation. The cash currency is the most liquid, if you urgently need capital for some kind of need: do not have to spend a few days to withdraw the currency from the investment.

Nevertheless, there are enough caveats too. First of all, the cash currency is in any case subjected to inflation and depreciated over time. Cash does not allow you to react quickly to the situation on the market: you must first deposit it on the account, wait for the transfer, and then buy the necessary tools. For instant investment ideas this process can be too long.


Peer-to-peer lending is widely used in Europe and the United States. The interest rates on such sites are either set by creditors competing for the lowest rate, or are determined by the intermediary company based on the analysis of the borrower’s loan.

The sites of P2P-loans are engaged in the analysis of business projects and the selection of borrowers. The previous experience of business owners is also analyzed. Then the specialists study in detail the operations on the company’s settlement accounts in order to assess its solvency. The main criteria for selection of projects – at least 6 months of real business, the amount of revenue, as well as the absence of current delinquencies for other loans. Loan officers personally talk with the borrower, request financial documents, and also leave for the business. Screening companies at all stages is very significant, but the delay in loans is 4.5%, in contrast to the delay in the banking sector, which is at 17%.

Strategies are built, basically, around the formation of a portfolio of loans with different levels of profitability and risk. Depending on the borrower’s credit rating, the rate is from 20-25% per annum for A rating (completely reliable) to 40-45% for the D rating (high risk).

It is important to understand that investments in P2P-lending are not guaranteed – this is not a bank deposit insured by the state. Nevertheless, the sites are trying to protect the investor as much as possible. In addition to a careful analysis of the borrower, the loan agreement concluded between him and the investor includes liens and sureties, as well as when lending by the bank. If technical delays occur, the site takes care of reminding the borrower to pay, and in case of more serious problems, it helps to settle the situation, for example, by changing the payment schedule, if possible. In an extreme case, if the borrowing company does not return the deposit, the sites are connected to collection of collectors’ debt. In addition, in case of default the site returns the entire amount of debt to the investor.

Investment into sustainable, high return businesses

Investing into renewable, eco-friendly, sustainable projects is becoming more and more popular because it is not only highly profitable, but also ethical and environmentally friendly. It is the other type of investment which benefits humanity as a whole in the long run.
Here at Envestio we have handpicked the best investment opportunities for you. If you care about the environment, check out our current sustainable energy investment project on our website – click here!

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