Exchange or bank: we compare the ability to exchange currency and save funds

For most Russians, the bank deposit is the usual way to save money, and if they need to buy foreign currency, they go to the bank. However, life does not stand still, and today there are interesting opportunities for the preservation and augmentation of capital without high risks on the stock exchange.

Previously, we answered in detail the popular questions about the stock market, and today we compare exchanges and banks.
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Where to buy currency: Bank vs Exchange

The overwhelming majority of Russians do not need foreign currency all the time. But from time to time the need to buy or sell it comes from many. In the event that currency exchange operations need to be performed with a certain regularity, and the amounts involved amount to several thousand dollars or euros, then the exchangers and bank cash offices become not the most profitable option.

First of all, because of the large spreads, that is, the difference in the rates of buying and selling currencies. At the same time, the rate may significantly deviate from the officially established by the Central Bank and the exchange.

All this translates into substantial loss of money during exchange operations. But there is another way - the purchase of currency on the Moscow Stock Exchange.

Why the exchange is the most reliable place to exchange currency.

Before proceeding with the transfer of the advantages of buying currency on the stock exchange, it is worth explaining that this is exactly the Moscow Stock Exchange, on which, besides the stock and derivatives, there is also a foreign exchange market. We do not discuss trading on Forex and do not urge to engage in investments in this market because of a number of negative points (we wrote about them, for example, here and here ).

The Moscow Exchange is the official and one of the most popular places for buying and selling currency. Suffice it to say that the Bank of Russia sets the official exchange rate of the Russian ruble on the basis of the results of exchange trading. Moreover, banks that offer currency exchange services themselves buy and sell it on the exchange. Moscow Exchange is one of the first organized trading platforms in Russia. Transactions with currencies carried out on it since 1992.

Exchange market is characterized by transparency, reliability and responsibility of its participants: brokers providing access to it are officially accredited, have licenses of the Bank of Russia and comply with Russian legislation - unlike the so-called forex dealers, which can often be registered offshore and not licenses (despite the entry into force of the rules that oblige forex companies to obtain such licenses). As a result, there may be situations described, including in the comments to our articles . When working on the Moscow Exchange this is impossible.

Why the exchange is more profitable than a bank

The main reason is a more profitable course. The difference between the purchase and sale prices on the foreign exchange market of the exchange amounts to tenths of a penny, and not a few rubles, as in the exchange offices of banks.

There are a whole list of other important advantages:

• the probability of fraud when buying currency on the stock exchange is reduced to zero;
• It is very convenient to perform operations: you can do it without leaving your home, for example via the Internet through a trading terminal and even a mobile phone ;
• purchased currency can be used as a pledge for other transactions, for example, with securities;
• in the event that a brokerage account was used only for currency exchange (for example, the conversion of rubles into euros), then there is no obligation to pay taxes.

For example: if you need to exchange a not very large amount of money, then the commission for a single transaction within the framework of the “delivery” tariff from ITinvest will be only 0.1%.

The cost of withdrawing a currency purchased on the stock exchange from a brokerage account to a bank account in ITinvest is fixed and does not depend on the bank. For an amount of up to 5,000.00 USD (US dollars) inclusive - 1,400 rubles. For the amount from 5 000.01 to 100 000.00 USD (US dollars) inclusive - 1825 rubles. For the sum over 100 000.01 USD (US dollars) - 3500 rub.

disadvantages

The main disadvantage of using the exchange-based currency market is the presence of several links in the chain of actions - from the occurrence of the need to carry out operations to the appearance of currency on the bank account. It is necessary to open a brokerage account in a company that has a license to work on the foreign exchange market of the exchange (the list is available here ), to withdraw funds from it to the bank. All this takes time. Although brokerage companies seek to facilitate the procedure. For example, in ITinvest you can now open an account online using the portal of state services. This method is also convenient for those who live in small cities of Russia.

Nevertheless, in the absence of the need to periodically exchange relatively large amounts in foreign currency, bank exchangers may be more convenient (although the risks associated with their use persist).

Saving finances: contributions or exchange

As stated above, the overwhelming majority of Russians prefer to keep their money in the old manner in a bank. However, in the conditions of a certain instability of the banking system, the reliability of this customary method of saving finances is no longer so high: the Central Bank revokes licenses from banks with enviable regularity, and the deposit insurance system covers only a fraction of a certain amount. Over the past year, the number of operating credit institutions decreased from 834 at the beginning of 2015 to 733 at the beginning of 2016, which represents 12% of the total number of Russian banks.

In turn, there are new investment instruments that allow working with a relatively small risk on the stock exchange and represent a good alternative to bank deposits. Consider some of them.

Placement of funds

In fact, it is an alternative to bank deposits. Money from a demand- based brokerage account is kept on the Moscow Stock Exchange (CJSC NSD - we wrote about this in more detail in the past ) and is placed daily in repos with the central counterparty on the security of highly liquid securities at current market rates.

Simply put, the point is this: the investor gives the broker money and pledges the securities of well-known companies. After the expiration of the agreed period, the reverse operation takes place: the investor receives his money back, plus interest on them.

An important advantage: interest is calculated daily and does not burn if the investor decides to close the brokerage account and withdraw his money (this can be done any day). Few banks will be able to offer such conditions for deposits.

It is also worth noting that, under such a scheme, all the risks lie on the Moscow Stock Exchange, which guarantees the parties to fulfill their obligations.

What else: deals with precious metals

Buying precious metals on the stock exchange is simple and fast, unlike ordinary life, where this process is extremely long and fraught with certain difficulties. On the Moscow stock exchange you can buy non-cash gold and silver. Calculations for all transactions are in Russian rubles. Prices are determined in rubles per gram. To start selling and buying precious metals, you need to open a brokerage account.



At the moment, not many brokerage companies provide access to the market for precious metals - one of them is ITinvest. You can learn more about the process of buying gold and silver here , and open an account to buy gold and silver - here .

Individual investment account and federal loan bonds

From January 1, 2015 in Russia there is the possibility of opening the so-called individual investment accounts - IIS.

IIS is a brokerage account that gives its owner the right to tax benefits. Benefits are divided into two types. The first type of exemption - a tax deduction of 13% of the amount paid - is suitable for people who are not going to try themselves as active investors. The benefit of the second type is designed for those people who not only put money on IIS, but also actively use them to invest in bonds, securities, currency and other financial instruments. We talked in detail about this tool earlier, and now we will once again describe its capabilities briefly.

IIS is a new opportunity to increase investment income. With this tool, tax residents of Russia who have official income can receive a tax deduction of 13% of the deposited amount (the maximum amount of funds for depositing is 400 thousand rubles per year), for this you don’t need to do anything - just put on the account money.

However, it is necessary to take into account the fact that in order to receive the deduction the money must lie on the account for 3 years from the moment of the first replenishment - the deduction can be obtained by the results of the first year. If the money is withdrawn from the account, then the resulting deduction will have to be returned.

A more justified option seems to be that the funds in IIS are not only placed for tax deduction, but also used for investments in federal loan bonds (OFZ). The owner of the investment account can buy such bonds for the entire amount of his account, having received a profit in the form of bond yields plus the same tax deduction of 13%. In this case, you can count on a total yield of around 16%.

The risks of working with OFZ do not exceed the risks of deposit storage in a bank. Income on them is guaranteed by the state. The circumstances in which the state will not be able to fulfill such obligations is a default that will cause problems in the country's banking system (with corresponding consequences for the deposits of the population).

Learn more about IIS and options for using this account can be found in our video:

Investment in structured products and Eurobonds

Another tool that allows an investor to receive a guarantee of full protection of their initial money even in case of adverse developments in the market.

A structured product is a financial instrument that combines various assets and has a number of key parameters:

• the level of capital protection (it can be different - at the choice of the investor - and reach 100%);
• possible profitability;
• validity period (from 3 months);
• underlying asset (currency, stocks);
• the minimum amount of investment (from 300 thousand rubles.).

There are various types of structured products that involve varying degrees of capital protection and investor participation in working with assets. That is, it is possible both to simply invest in a product already included in advance by analysts of an investment company, which includes different assets, and to independently set up such a combination flexibly.

For example, in ITinvest customers can work with several types of products with capital protection - for more information about them you can read the link .

Eurobonds are another tool that is used to insure against ruble depreciation. In essence, this is an alternative to dollar deposits at the bank: they have a higher yield (up to 9% in foreign currency, additional coupon income is accrued daily), and are highly reliable (only major companies issue eurobonds whose stability is beyond doubt).

In addition, eurobonds of serious companies are a liquid instrument that can be easily resold. The minimum amount for commencing transactions with eurobonds is $ 1,000 in rubles (on the Moscow Exchange and outside of it).

Detailed description of investments in Eurobonds and possible cases of their use are presented here.

Note : it is important to understand that when working with structured products, and when investing in Eurobonds, it becomes necessary to pay income tax.

Once again on security issues

The assets on the brokerage account are not insured - in contrast to the bank accounts, which are subject to the deposit insurance system. However, risks can be minimized by initially selecting a reliable broker. All activities of Russian brokers are licensed, it is regulated by Russian legislation, namely the Civil Code of the Russian Federation, the Law on the Securities Market and other regulatory and legal acts of the Central Bank of Russia.

The Central Bank of Russia is the supervisory authority for brokers - as well as for banks. That is, the work of banks and brokerage firms is regulated by the same department.

In fact, the money is not stored at the broker, but on the stock exchange, it is forbidden by law to impose any penalties on them, so if something happens to the broker, they can always be collected through another broker appointed by the Central Bank.

Shares purchased on the stock exchange are also impossible to lose, because they are not stored in the account itself, but in the National Settlement Depository (NSD). NSD is essentially a state “bank” in which money and securities of participants in the stock and foreign exchange markets are kept. Transfer of shares from NSD to any place without the knowledge of the client is simply illegal.

All of the above does not negate the fact that it is necessary to take a balanced approach to the choice of a broker (we told about what to pay attention to in one of the past materials).

Conclusion

Methods of keeping money evolve. In addition to banks, there are now other ways of storing, investing capital and performing familiar transactions like currency exchange. And the exchange here can offer tools that can become a worthy alternative to the usual banking products with moderate investment risk.

PS On June 30, 2016 at 19:00 a seminar “Remote opening of a broker account or what is ESIA” will be held in the Moscow Exchange building - during the event, representatives of the Exchange and ITinvest will tell about the world experience of organizing remote opening of brokerage accounts, as well as respond to common questions on the topic.

The seminar is free, but to participate you must register at www.itinvest.ru/education/courses/konferenciya-gosuslugi (online broadcast will also be available).