Diversify your Savings The smart way to save and invest All investments experience ups and downs, which can be triggered by events in the economy, share market, political environment and general unforeseen factors. Because many of these elements are out of your control, it may make sense to reduce your risk, especially if you are saving for retirement or already retired. One of the main ways to do this is by diversifying your portfolio into different types of investments, and including bank deposits such as a Fixed Term Account. Why Fixed Term Deposits? By diversifying your savings into a Fixed Term Deposit, you are free from the disadvantages of an asset which cannot always be easily sold or exchanged for cash without a substantial loss in value. While there are benefits to having investments in shares, mutual funds and property, there are also difficulties and drawbacks such as: Picking the right investment in volatile market conditions, Guaranteeing your return of original capital Converting your investment into cash within an acceptable time frame. In contrast, the main benefits of a Fixed Term Deposit are: Reliable and guaranteed returns, Fixed rate of return, Capital returned at the end of the term and Local banks and their products are regulated by the Malta Financial Services Authority and are participants in the Depositor Compensation Scheme established under the laws of Malta. But isn’t my money invested for a set period? Yes, your original deposit is invested for a set period, which you have chosen in return for a guaranteed fixed rate of income. To increase your flexibility, one option is to choose multiple terms. The example below can explain this concept in more detail. Example 1 If your total deposit is €100,000 this may be split into five equal fixed term accounts. This way you can have a term deposit maturing every year and most importantly an opportunity to assess your current financial position and make a decision on your next investment option. Deposit Term Selected Value Invested Start Date Maturity Date A 1 Year €20,000 1.1.2016 1.1.2017 B 2 Years €20,000 1.1.2016 1.1.2018 C 3 Years €20,000 1.1.2016 1.1.2019 D 4 Years €20,000 1.1.2016 1.1.2020 E 5 Years €20,000 1.1.2016 1.1.2021 As you can see from the above table you will have €20,000 maturing every year on the 1st January which will provide an opportunity to make an investment decision on whether to renew your term deposit or use your funds for another purpose. The advantage of this approach over investing the entire €100,000 into a one year term is that you will also benefit from the higher rates offered on longer terms. Disclaimer: This is an illustration only and does not take into account your specific goals and circumstances. To ensure you are successful in making your money work hard for you, your FCM Customer Advisor will be able to explain the FCM Fixed Term Deposit products and how you can use it to suit your financial needs. FCM Bank does not offer advice and we recommend you seek financial planning advice from an authorised professional to support your investment decisions.