Low-risk exchange investments: how to use IIA accounts and bonds as an alternative to bank deposits
In recent years, bank deposit rates in Russia have been at fairly low levels. This leads to the fact that this tool is less suitable at least to preserve finances, not to mention earnings. Therefore, more and more people are looking for other ways, but here everything is not so simple – for example, the cost per square meter of real estate in Moscow has not actually been growing for many years.
Another option is stock investment. There is already an opportunity to earn more, but there are also significant risks that you want to control. Therefore, in recent years, investment tools have been developing more and more actively to solve this problem. Among them are IIS accounts and bonds of federal loans and large Russian companies. Today we’ll talk about them.
Note: any investment activity on the exchange is associated with a certain risk, this must be taken into account. In addition, to use the methods described in the article, you will need a brokerage account, you can open it online. You can study trading software and practice performing operations using test access with virtual money.
What is IIS
The term IMS stands for "individual investment account." This is an investment tool that appeared several years ago, which is designed to introduce people to the exchange, but at the same time provide them with a high degree of reliability.
At its core, IMS is like a savings account: you need to put money on it, which must remain on the account for at least three years. In this case, the investor is entitled to various types of tax benefits. Initially, it was possible to place on the account up to 400,000 rubles, later the amount was increased to 1 million rubles.
What it gives: investment account benefits
IIA account holders can expect to receive two types of benefits. The first of these is a tax deduction (13%). To get it, you need to deposit money into the investment account, as well as have an official taxable income (PIT). For example, if you deposit 400 thousand rubles on the IIS, then a maximum of 52 thousand can be returned as a deduction – for this you will need a salary of 33 thousand per month. According to the rules, money must be in the IIS account for three years, it can be withdrawn earlier, but then the deductions will have to be returned.
That is, this benefit is suitable for passive investors who do not plan to make transactions.
Another benefit that is available when using IMS is exemption from income tax from transactions on the exchange. This is already a plus for those who would like to try their hand at investing on the stock exchange, but are not ready to take big risks. Let's talk about how this can be implemented in practice.
Low-risk investments and IIA
To achieve minimal risks and income that exceeds interest on bank deposits, you can use bonds. There are different options. One of them is the federal loan bonds of Russia.
OFZs are securities issued by the state in order to attract additional money to the budget – and pays a percentage for it. OFZ yield in November 2019 is from 6-6.6%, that is, it is approximately equal to the rates on most deposits (although there are deposits with higher rates).
When working with such bonds, the level of reliability is very high, although they are not covered by the bank deposit insurance system. If the investor does not receive income on OFZs, this will mean that the state refuses to pay debts. That is, a default will occur. In such a situation, the reliability of bank deposits and in general the stability of the country's financial system will be a big question.
Bonds are also issued by large Russian companies – the yield on them is higher than in the case of OFZs. As a result, using a model portfolio that combines bonds of different companies, including those with state participation, you can earn up to 12.9% per annum.
Here is an example of a description of such a portfolio created by ITI Capital analysts:
As you can see, to start the investment does not need large investments, the strategy itself is suitable for conservative beginner investors. An important point: all income will be exempt from income tax – the second exemption for IIA accounts is being implemented.
Useful links on the topic of investment and stock trading:
- Open a brokerage account online
- Test account with virtual money
- Software for trading on the exchange: trading terminal, mobile applications
- Structural Products
- Model Portfolios
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