For many Finns, buying a home will become a topical issue at some point in their lives. However, a mortgage requires either a guarantor or sufficient savings. For this reason, many people start saving for an ASP account for this purpose.
However, this is a big loan and the mere saving of an ASP account is in itself a nice amount. Occasionally, life can come up against unexpected situations, and you may have to consider withdrawing your ASP money account if there are no other major savings.
What happens if I close my ASP account?
Completely terminating your ASP account will mean that no additional percentage will be paid. Normally an additional interest of 1% is paid on an ASP account at a contractual rate of between 2% and 4%. However, the current capital, ie the deposit, is not lost and there are no other specific sanctions. Thus, if you terminate your ASP account, you will forfeit the agreed additional interest, but will still receive the deposit plus the 1% interest charged on it free of tax.
Normally, the tax authorities charge a withholding tax of 30% on the deposit rate, which the bank automatically pays to the tax authorities. You will not be charged this 1% interest on your ASP account.
If you often have to wonder if money is needed, just a regular savings account can be a good option.
In an emergency, is it worth terminating my ASP account?
If you know you are going to buy a home, of course, the smartest solution would be to keep the money in your account and let them charge an additional 2-4% interest instead of spending it on something. Interest will only be paid if you reach your savings target and buy a home.
The reason for closing your ASP account is probably because the money is needed for some other purpose. However, the first thing to think about is whether to wait until payday. If your need for money is really sudden and low, consider whether a credit card would be a good option, for example. It can also be easier to get this than to unblock your ASP account.
Some credit cards have a very reasonable interest rate of less than 10%. In addition, credit cards offer an average 30-day interest-free payment period, during which you do not have to pay interest. So if you know you can fix your cash situation the next payday, a credit card can be a handy financial solution. However, the ASP account accrues interest, and it is a good idea to break the interest-on-interest phenomenon.
What if you could not pay your credit card bill in full on the next payday
But for example by reducing it by $ 100 per month? The following calculation assumes that the ASP account would be used to purchase a home within three years and the money has been in the account for one year.
- $ 10,000 x $ 1.05 ^ 3 = $ 11,576.25, or three-year revenue from your ASP account
- The ASP account therefore generates a profit of € 1,576, which is the limit on the profitability of a loan
- The total price of a € 100 credit card bill would be our comparison with a maximum of 21.92% real annual rate of € 1,219.2
- If the loan were to be repaid 100 € / month, it would be paid off in about a year.
- The total cost of using a credit card would be less than the revenue from your ASP account
- So using a credit card instead of closing your ASP account would be profitable in this case!
However, the result of the invoice depends on the amount of savings in your ASP account and the amount of credit used. The basic principle is that if the total cost of borrowing is less than the interest earned on your ASP account, then borrowing is profitable. However, the loan must always be repaid in full from your own income.
On the other hand, some credit card issuers charge an annual fee even if the card is not used at all. Others add an account management fee on top of the interest if you have an interest-bearing credit on the invoice, while some charge on the interest other than interest.
From our comparison you can see the costs and other features of all credit cards listed so you can choose the one that suits you best. There are many differences and some credit cards can also offer the benefits that are right for your situation, so compare carefully.