Basic financial institutions in Poland
This section discusses the most popular products in detail so that you can make informed choices.
Personal and savings accounts
Personal account (ROR):
For day-to-day financial management. From it you pay your bills, receive your salary
Savings account:
Used to accumulate money. The money is interest-bearing, which means that the bank adds interest to it. It is easy to access
Interest tax – In Poland, capital gains tax, known as the “Belka tax”, is a flat-rate income tax on capital gains. The tax rate is 19%. The tax is levied on the excess of profits over costs, rather than on the entire value of the investment. It covers various forms of saving and investment, such as profits from bank deposits, savings accounts, bonds, shares and other securities. In the case of deposits and savings accounts, the bank automatically collects tax on the accrued interest. In the case of profits from the stock market, the investor must account for the tax himself in his annual tax return.
Bank deposits
This is a product for people who want to save for the long term.
Characteristics:
You freeze your money for a certain period of time (e.g. 3, 6, 12 months), and the bank pays you a higher interest rate than in a savings account.
Risks:
If you withdraw the money before the end of the deposit term, the bank will take away your accrued interest.
Payment cards
You freeze your money for a certain period of time (e.g. 3, 6, 12 months), and the bank pays you a higher interest rate than in a savings account.
Debit card:
Linked directly to your personal account. You spend the money you actually have. It is a tool for managing your own funds.
Credit Card:
It’s a form of loan from the bank. The bank gives you a limit up to which you can go into debt.
- Interest-free period: If you repay your debt within 20-50 days, you will not pay any interest.
- Risks: Failure to make timely repayments carries a very high interest rate, which can lead to a debt loop.
Credits and loans
Cash loan: For any purpose. You repay it in installments, with additional interest.
Mortgage loan: For the purchase of an apartment or house. It is a commitment for many years.
Important: Always check the APR (Real Annual Percentage Rate of Interest).
RRSO: What is it and why is it so important?
RRSO (Annual Percentage Rate of Interest) is the most important indicator you should pay attention to when comparing different loan and credit offers. Unlike the interest rate itself, the APR shows the total cost of the loan on an annual basis. This allows you to easily assess which offer is actually the cheapest.
What goes into the RRSO?
The APR takes into account all the costs you have to pay for the loan, including:
- Interest rate: the basic fee for borrowing money.
- Fee: A one-time fee for granting the loan.
- Insurance costs: It is not uncommon for banks to require credit insurance, and its cost is included in the APR.
- Other fees: Such as application processing fees, administrative fees, or costs associated with property appraisal (in the case of a mortgage).
How do you compare offers based on RRSO?
When comparing offers, always check the total amount to be repaid and the interest rate. An offer with a lower interest rate is not necessarily cheaper. For example, a bank with a lower interest rate may have a very high commission or hidden insurance fees that will significantly increase the final cost.
Remember that banks are required to state the APR in their advertisements and contracts. Never make a decision to take a loan based on the interest rate alone. Always ask for a loan simulation and pay attention to the final amount to be repaid.