How do you multiply your money?

1. Consumption
2. Saving
3. Investing

What does it mean to save?

1. Spending money wisely
2. Giving up part of consumption
3. protection of wealth held

Forms of saving:

1. "Sock"
2. Bank account
3. Bank deposit - fixed, variable, progressive interest rate
4. Savings account
5. Bonds

INVESTMENT = SAVING + RISK

• To invest we need savings
• There are no assured investments

A bank deposit consists of depositing in a bank a certain amount of money for a predetermined period of time. 
After the expiry of this period, the bank will reimburse us the full amount of the plus interest. 
Objective: To protect the value of capital.
Characteristics: Very low risk, low return on investment.

The most important parameters of deposits:

1. Duration of contract
2. Interest rate
3. Type of interest rate: fixed or variable
4. Frequency of interest capitalisation: from daily to realised at the end of the contract
5. Contract termination method: renewable or not

Deposits: tricks and traps

1. Penalties for early termination of deposits
2. Fixed interest rate for a long period when inflation is present 

falls - and vice versa

1. Gross interest rate per annum
2. Deposits linked to investment funds
3. Progressive deposits

Deposit in the form of life and endowment insurance - Polysolokaty
How does it differ from a deposit (dane- Poland) ?

1. We do not pay tax on capital gains 
2. It is not protected by the Bank Guarantee Fund, it is protected by the Insurance Guarantee Fund

Bonds
A bond is a debt paper that confirms the granting of a loan for a fixed period to its issuer. The issuer of a bond can be either national governments (government bonds) or companies (corporate bonds).
Objective: To protect the value of capital
Characteristics: Low risk (lowest in government bonds), low return on investment.

Factors affecting bond interest rates.

1. Creditworthiness of the issuer
2. Asset-backed bonds
3. Rating - assessment of the credibility of an issuer
4. Interest rates - lending rates

Bonds - pitfalls.

1. Penalties for early resale of bonds to the issuer
2. Commission for the sale of bonds on the secondary market
3. Interest rates that do not provide a guarantee of capital value

Example:
How much will you earn after the first year on a 2-year bond with an interest rate of 5% if annual inflation was 4.1%?

Answer:
After deducting tax, you will get 5% - 5%*0.12% (tax) = 4.4%. Realistically you will gain: 4,4%- 4,1% = 0,3%

An investment fund is a form of collective investment of money. The capital, which consists of contributions from individual participants, is invested in financial instruments, depending on the type of fund, e.g. shares, bonds, deposits, real estate, etc.
Objective: To multiply capital
Characteristics: 
Moderate to high level of risk (depending on fund type), high level of investment return possible.

Advantages of investing in a fund:

• Professional service
• Combined capital
• Diversification
• Easy access to money
• Safety
• Easy access to current information/comparisons
• Clear fees

Investing in the stock market, e.g. in shares

Benefits:

• Unlimited potential
• Dividend income
• I do not pay for management

Disadvantages:

• I manage myself, I pay taxes
• Worse conditions for diversification
• Higher risk

Diversification
Diversify the investment portfolio, by investing in financial products that differ in their rate of return and level of risk. 

Diversification objectives:

• Diversity
• Lowest possible correlation between products

Advantages of diversification:

• A loss of capital in one area is offset by a gain in another product,
• Even in the most unpredictable scenario, the individual products will balance out.

Internet banking is the name adopted to define human banking operations via the Internet. All that is required to carry out banking operations via the Internet is an Internet-enabled computer with a browser. Internet banking is also referred to as any kind of business venture that uses the Internet for banking operations. 

Depending on the bank and the software used, this service may allow for passive viewing of account balances and possibly obtaining general information on banking services, or for active account operations. According to the Electronic Payment Instruments Act, in the e-banking services agreement, the bank undertakes to provide access to the funds held in the account via wired or wireless communication devices used by the holder, and to perform operations or other activities ordered by the holder. 

The most important services that can be provided through online banking

1.     access to the list of accounts and transaction history,
2.     receiving basic information about the bank and its operations,
3.     execution of domestic and foreign transfers to own or third-party accounts,
4.     setting up deposits and investing funds.

Banks incur large costs for online banking, some of which are passed on to the customer. However, the costs incurred are recouped over time in the form of lower costs for banking operations. Internet banking is still a supporting element for traditional banking, although there are now banks that have based their distribution solely on the Internet. 

Risks
The use of online banking by users carries serious risks, as outsiders may learn the banking code. That is why computer companies have found several solutions to prevent such situations from occurring. The best solution is the token, which is a small cryptographic device that generates by itself the one-time codes needed to identify and accept a customer's decision; these are issued to customers for a fee or, in some cases, free of charge. An electronic signature is also considered a good security measure. 

What is a bank loan?
A bank loan is a written agreement between a consumer and a bank. Under it, the bank undertakes to make a certain amount of money available for a certain period of time, while the borrower is obliged to use the funds received in accordance with their purpose, as specified in the terms of the agreement, and to return them together with the remuneration due to the bank in the form of commission and interest.

A bank loan is characterised by features such as:

1.     manoeuvrability,
2.     timeliness,
3.     interest rate.

Bank loan vs.
It might seem that the terms credit and loan are used interchangeably and mean the same thing. However, the actual legal differences are significant. First of all, credit can only be granted by banks and credit agreements are governed by banking law. They must contain information on the time limit for repayment of the funds, fees related to the granting of the loan, commissions and interest. Credit agreements are regulated by banking law.

A loan, on the other hand, can be granted by anyone with spare funds. In addition, it is significant that a written contract is not required for amounts of less than PLN 500. There is also no obligation for the loan contract to specify the repayment period or the characteristics of the loan. A loan is subject to the rigours of the Civil Code.

Basic types of bank loans
Bank loans dedicated to individual customers and companies. Five basic types of loans can be distinguished:

1. consumer credit - a bank loan which is intended to meet certain current needs of the borrower; it is taken out, for example, for the purchase of a computer, household appliances; the repayment period may be from several months to several years;
2. mortgage loan - a mortgage loan is granted for the purchase of a property or the realisation of a construction project; the repayment period is up to several decades and the contract itself is characterised by complex terms and conditions;
3. investment loan - this is mainly for ventures that increase the borrower's wealth, such as the purchase of shares or long-term securities; the different types of investment loans are especially worth knowing if you are an entrepreneur;
4. consolidation loan - taken out to combine several liabilities into one loan, making it possible to extend the term of the loan and lower the monthly instalment, which significantly reduces the monthly financial burden on the household;
5. credit card and revolving credit - commitments that are linked directly to a bank account; at a fixed time, the borrower can use the amount made available by the bank, and if the money is returned within the interest-free period, the money is borrowed for free.

Types of bank loans by maturity
When considering the term of the commitment, three types can be identified:

1.     short-term - granted for up to 1 year;
2.     Medium-term - with a repayment term of between 1 and 3 years;
3.     long-term - with a repayment term of more than 3 years.

On the other hand, if the primary criterion for division is the subject matter of the contract, we can divide a bank loan into:

1.     housing loan;
2.     consumer credit - distinguishing between:

•     cash credit;
•     car loan;
•     student loan;
•     savings and checking account credit.

Forms of security for bank loans
Depending on the type of bank loan to be taken out, the client must expect to provide an appropriate form of collateral acceptable to the bank. In the case of consumer loans, income earned by the borrower is most often sufficient collateral. The situation is different when taking out a mortgage loan. Here, the customer is required to provide a mortgage, but may also be required to provide a blank bill of exchange or a surety.

There are two types of collateral for bank loans - personal and material.
Personal safeguards include:

•     blank promissory note;
•     bank guarantee;
•     personal guarantee;
•     surety on a bill of exchange;
•     assignment;
•     credit insurance;
•     accession to debt.

As far as in-kind collateral is concerned, however, these include:

•     deposit;
•     mortgage;
•     blocking of funds in a bank account;
•     pledge;
•     security transfer.

If the loan is not repaid, the bank terminates the contract with immediate effect and demands repayment of the obligation. In the event of default, the bank enforces its claims against the aforementioned collateral.