Actually, every person experiences need to save certain amounts of money. It is caused by fact that unforeseen situations happen in our life. And they might be different. For example, urgent procurement of necessary life attributes, changing of circumstances, unexpected disease or sudden dismissal. Cases often vary. In such situation, as a rule, the individual need additional funds. And lack of money reserve can put him/her in difficult situation.

If you have such money reserve, immediately two questions are raised: where to keep these funds?

First, you have already certain amount of money, and you do not know how to save them or accumulate. Suppose that you have 20 thousand soms. But you do not want to keep them at home as you are afraid of theft; or you do not want to buy some assets (for example, the livestock). Often, people have temptation to spend money.

In this case, the banking institution comes to help you; it is established to offer you daily services to manage your assets, in this case – your money. Thus, you can place your money in the bank in a form of deposit. In its turn, the bank offers you income in a form of deposit, which will be charged depending on conditions of bank deposit or saving account.

Another key question is money purchase power. Their cost may be decrease by inflation. At present, when we talk about savings, reserving or revenues, we have to remember about time-bounded cost of money, i.e. we consider not only AMOUNT but TIME as well.

From one hand, the bank pays interest on deposits with longer period; however, money becomes cheaper over time. There is inflation, i.e. you can buy more with 1000 soms rather after one year. Let’s see example of money purchase power. For instance, before May 1m 2012, you put 800 soms in money box – it is enough for 100 trips in minibus. On May 1, 2012, tariffs on minibus transportation were raised from eight to 1- soms (after 21.00 – 12 soms). And in May, this amount was sufficient only for 80 trips (in evening – even less). In other words, purchase power of these 800 soms was declined from 100 to 80 trips.

Such digression is important from point of view in order to show money purchase power.

Now we come back to question, why it is crucial and safe to work with the banks. The matter is that every bank has its offer in form of deposits and saving accounts. Conditions and terms are different. Selection of the bank is your personal decision. But we would like to inform you about following fact – the deposits are insured by the legislation.

In other words, under occurrence of warranty case, i.e. bank bankruptcy, in line with the Law of the Kyrgyz Republic “On deposit protection”, every depositor (one person on whose name the bank account is opened) is paid a compensation not more than 100 thousand soms in aggregate, including interest on deposits. It is only in case that the depositor does not have debts against this bank.

Compensation payments in case of warranty situation are paid from the Fund of deposit protection formed due to payments of the government of the country and commercial banks – participants of the mandatory system of deposit insurance.