A foreign currency deposit is a bank deposit maintained in a Polish bank, however in a currency other than Polish. The most popular currency deposits are in American dollars, Euros and British pounds. What should I pay attention to before making a decision about setting up a deposit and what are the advantages of such a product?

How does a foreign currency deposit work?

The mechanism of operation of a foreign currency deposit is identical to that of a traditional PLN deposit. Funds are "frozen" for a few or several months (depending on the duration of the deposit), after the deposit period interest after taxation is added to the capital and early termination of the deposit can only result in the loss of interest.

Foreign currency deposits usually bear interest rates lower than PLN deposits. Why would I do that? This difference is mainly due to much lower interest rates of central banks in Europe or the USA in relation to NBP rates set by the Monetary Policy Council.

It should also be remembered that a foreign currency deposit carries some risk, resulting from changes in exchange rates. In the period when the value of the Polish zloty increases in relation to the deposit currency - we can simply lose it. It is difficult to clearly state how much, because it depends strictly on the difference in exchange rate of a given currency pair. On the other hand, if the zloty weakens on the currency deposit, we can also gain a lot.

Are you looking for a deposit tailored to your needs? Find out more.

How long does a currency deposit last?

A currency deposit, like a deposit in PLN, may last - depending on the bank's offer - from a few to a dozen or so months. It is worth remembering that in case of early termination of a deposit you may lose interest or part of it (depending on the offer of a given bank).

Who's the currency deposit for?

A currency deposit is an excellent way to invest money for people who earn money in a currency other than Polish and for customers who want to invest part of their savings in a foreign currency.

Mortgage loan and currency deposit:

If you are repaying a loan in Swiss francs, it is a good idea to make a deposit in this currency. This way you will be able to minimize the effects of currency fluctuations.

If the exchange rate of the franc increases, the loan installment will be higher. In addition, the value of the deposit will also increase, which will help to reduce potential losses.

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