Questions-Answers

The choice of currency for a deposit depends on several factors, including the current economic situation, your financial goals and risk preferences. Here are some aspects to consider when choosing between a deposit in the national currency (soum) and a deposit in US dollars, based on interest rates of 23% p.a. for a soum deposit and 7% p.a. for a foreign currency deposit.

Deposit in national currency (soum)

Advantages:

1. High interest rate: 23% per annum is significantly higher than 7% for dollar deposits, which can lead to higher income if the exchange rate remains stable.
2. No exchange rate risks: You are not exposed to exchange rate risks if your main expenses are also in soums.
3. Accessibility: It may be easier to deposit and withdraw funds, and to conduct transactions in local currency.

Risks:

1. Inflation: High inflation can "eat up" some of the income from a deposit, reducing its real return.
2. Devaluation: If the exchange rate of the sum falls against the dollar, your savings may lose their value against the dollar.

Deposit in USD

Advantages:

1. Stability: The US dollar is considered one of the most stable currencies in the world, which reduces the risks of currency fluctuations.
2. Protection against devaluation: If the Sum devalues, your savings in dollars will retain their purchasing power.

Risks:

1. Low interest rate: 7% p.a. is much lower than 23% for the sum, which may result in lower income in nominal terms.
2. Currency risks: If the exchange rate of the sum is stable or rising, the income from a dollar deposit may be lower than that of a local currency deposit.

What to choose?

Recommendations:

1. For higher returns in a stable economy: If you are confident of a stable economy and low inflation, a local currency deposit with a high interest rate (23%) may be more profitable.
2. For protection against economic instability: If you fear high inflation, a deposit in USD, despite the lower interest rate (7%), may be more secure.

Calculation example

Suppose you have UZS 1,000,000 to deposit.

UZS deposit at 23% per annum:

• Annual interest income: UZS 1,000,000 * 23% = UZS 230,000
• Total amount at year-end: UZS 1,230,000

USD deposit at 7% per annum:

• Conversion of the deposit amount into USD at the rate of 1 USD = 12,600 UZS::
• UZS 1,000,000 / UZS 12,600 per USD = USD 79.37 (rounded up)
• Annual interest income in USD: USD 79.37 * 7% = USD 5.56 dollars (rounded down)
• Total amount at year-end in USD: USD 79.37 + USD 5.56 = USD 84.93
• Conversion of the total amount into UZS at the rate of 1 USD = 12,600 UZS:
• USD 84.93 * USD 12,600 per 1 USD = UZS 1,070,118 (rounded up)

Comparison of totals

• Total amount after one year in sums (UZS deposit): UZS 1,230,000
• Total amount after one year in sums (USD deposit): UZS 1,070,118

Conclusion

Based on this example and the current exchange rate, a deposit in the national currency (soum) at 23% per annum yields significantly more income than a deposit in US dollars at 7% per annum, provided that the dollar exchange rate remains stable at 12,600 soums per dollar.

The depositor can execute a power of attorney for another person, giving him/her the right to manage the deposit. For this purpose, it is necessary to apply to the bank and submit a notarized power of attorney. The authorized person will be able to perform operations on the deposit within the limits of authority specified in the power of attorney.

Procedure for transferring the right of contribution

1. Visit to the bank
   The depositor and/or authorized person should visit the bank branch with the necessary documents (passport, power of attorney, deposit agreement, etc.).
2. Drawing up the necessary documents
   At the bank it is necessary to fill in applications and execute all necessary documents for transferring the right to the deposit.
3. Notarization
   If a power of attorney is executed, the documents must be notarized.
4. Informing the bank
   The bank must be notified of the changes and all changes must be recorded in its system.

1. Fixed-term deposit - Deposit opened for a certain period (from several months to several years).
2. Accumulation deposits - Deposit that can be replenished during the entire validity period.
3. Call deposit - Deposit without a fixed term, wherefrom the funds can be withdrawn at any time.
4. Foreign currency deposit - Deposit opened in foreign currency (US dollars, Euros, pounds sterling, etc.).
5. Compounding interest deposit - Deposit for which interest is periodically added to the principal sum.
6. Deposit with the possibility of partial withdrawal - Deposit that allows you to withdraw part of the funds without losing accrued interest.
7. Deposit with automatic renewal - Deposit that is automatically extended for a new period at the end of the previous one.
8. Children's deposit - Deposit opened in the name of a child, usually with a longer period of deposit.
9. Investment deposit - Deposit that combines elements of a deposit and an investment product.