Interest income from deposits and fixed-income funds
Interest income is low-risk passive income, but the return depends on interest rates and inflation can eat it up. In this guide you compare deposits and fixed-income funds, understand deposit protection and learn how interest income is taxed.
You will need
- Online banking credentials
- An emergency fund already in place
- A sum you will not need during the investment period
- A comparison of deposit rates from at least three banks
Steps
Decide on the investment period
Decide when you will need the money: in a few months, a year or several years. In a fixed-term deposit the money is usually locked in for the whole term, and early withdrawal may cost you fees.
Compare deposit rates
Check deposit protection
Get to know fixed-income funds
Compare costs
Understand the taxation
Ladder your deposits
Track your real return
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