Starting to invest early is key to achieving financial stability in the future. One attractive investment instrument, especially for the younger generation who want to invest according to Sharia principles, is Sharia deposits. But why Sharia deposits, and why is it best to start young?
Why is Opening a Sharia Deposit Best Done From a Young Age?
Opening a Sharia deposit from a young age offers a number of benefits that you can feel well into your old age. The basic principle is the power of time and recurring returns or profit-sharing.
1. Time is money
The sooner you start, the longer your money has the opportunity to "work." Your principal will continue to grow with profit-sharing, which in turn will generate further returns. This creates a significant snowball effect.
2. Financial discipline
Starting to invest in a deposit early trains you to be disciplined in setting aside a portion of your income. This good habit will be very beneficial later on.
3. Planning for the future
Whether for education funds, buying property, or even retirement funds, Sharia deposits can be a strong foundation for long-term plans.
Profitable Investment from Sharia Deposits: Reinvested Principal and Profit-Sharing
One of the main attractions of Sharia deposits is their fair and transparent profit-sharing system. Profit-sharing is obtained from the business profits run by the bank, in accordance with the profit-sharing principle under mudharabah akad.
1. Compounded returns
When you deposit funds, you'll receive profit-sharing according to the agreed profit-sharing ratio at the outset. If you don't withdraw this profit-sharing and leave it in the deposit, it will be included as capital for the next period's profit-sharing. This is what's called compounded returns or recurring returns from the principal and profit-sharing that continues to be saved.
2. Sharia deposits use Sharia principles
For those looking for halal investments, Sharia deposits are the right choice. They are free from practices that are not in accordance with Sharia.
Sharia Deposit Compounded Profit-Sharing Simulation
For this simulation, we'll use the following assumptions:
- Initial Principal: Rp100,000,000
- Profit-Sharing Ratio (Estimated): Equivalent to 5% per year (this is a projection; actual profit-sharing can fluctuate).
- Term: 5 years
- Strategy: Profit-sharing isn't withdrawn but is reinvested back into the deposit principal.
|
End of Year |
Estimated Annual Profit-Sharing Calculation |
End of Year Deposit Balance |
|
0 |
(Initial Principal) |
Rp100,000,000 |
|
1 |
5% of Rp100,000,000 = Rp5,000,000 |
Rp105,000,000 |
|
2 |
5% of Rp105,000,000 = Rp5,250,000 |
Rp110,250,000 |
|
3 |
5% of Rp110,250,000 = Rp5,512,500 |
Rp115,762,500 |
|
4 |
5% of Rp115,762,500 = Rp5,788,125 |
Rp121,550,625 |
|
5 |
5% of Rp121,550,625 = Rp6,077,531 |
Rp127,628,156 |
Simulation explained:
- Year 1: From an initial capital of Rp100 million, you get Rp5 million in profit-sharing. Your balance becomes Rp105,000,000.
- Year 2: The profit-sharing is no longer calculated from Rp100 million, but from Rp105,000,000. So, the profit-sharing received in the second year is Rp5,250,000, which is greater than the first year. Your balance also increases to Rp110,250,000.
- Subsequent years: This pattern continues. Each year, the profit-sharing you receive will be larger because it's calculated from an ever-increasing principal (initial principal plus accumulated profit-sharing from previous years).
Why is This Profitable, Especially from a Young Age?
- Time is a key factor: The longer you deposit funds with a profit-sharing accumulation strategy, the greater the compounding effect you'll experience.
- Discipline pays off: By allowing profit-sharing to accumulate, you automatically increase your investment value without consistently adding new capital.
- Long-term goals: Compounded profit-sharing is ideal for achieving long-term financial goals because your funds grow exponentially over time.
Important note: The simulation calculations above do not include Sharia deposit tax deductions as per applicable regulations. The profit-sharing you receive will be subject to income tax.
Why Open a Sharia Deposit with Jago Syariah?
Jago Syariah is an innovative digital Sharia banking solution that makes it easy for you to save and invest. What are the benefits of opening a Sharia Deposit with Jago Syariah?
1. Jago Syariah’s Sharia Deposits adhere to Sharia principles
All Jago Syariah products and services are supervised by the Sharia Supervisory Board (DPS), ensuring compliance with Islamic principles.
2. Opening a Jago Syariah’s Sharia Deposit is practical and digital
You can open and fully manage your deposit, including withdrawing it, directly through the Jago application on your smartphone. There's no need to visit a bank.
3. Flexible term options for the Sharia Deposits
Jago Syariah offers a variety of term choices, from short-term to long-term, which you can adjust to fit your financial goals.
4. Competitive profit-sharing and Mudharabah akad adherence
By saving or investing in a Sharia Deposit, you can earn competitive profit-sharing. This profit-sharing is, of course, in accordance with Mudharabah Muthlaqah akad, where the customer acts as shahib al-mal (capital owner) and the bank as mudharib (fund manager). The bank has full discretion to manage the funds according to Sharia principles, and profits are distributed based on a pre-agreed ratio. The transparency and fairness of this contract bring peace of mind to your investments.
5. Connected to the Jago Syariah ecosystem
It's easily integrated with other features in the Jago application, such as Pockets for daily financial management.
Easy Ways to Open a Sharia Deposit with Jago Syariah
Opening a Sharia deposit with Jago Syariah is super easy, even for beginners:
- Download the Jago application: It's available on the Google Play Store and Apple App Store.
- Register and activate your account: Follow the steps to register your Jago Syariah account, which you can do from anywhere, anytime.
- Choose the Sharia Deposit product: Inside the application, select the option to open a Sharia Deposit.
- Determine term and amount: Enter the amount you want to deposit and choose your desired term, along with options for auto-renewal or withdrawal. For long-term investment and compounded returns, automatic renewal of both principal and profit-sharing is recommended.
- Confirm and finish: Follow the remaining instructions to complete the deposit opening process.
It's that easy! Your funds will soon start generating profit-sharing in accordance with Sharia principles.
It's Never Too Late to Save or Invest in a Sharia Deposit with Jago Syariah
While this article emphasizes the importance of starting a Sharia Deposit young, it doesn't mean you're too late if you're already at a more established age. It's never too late to start investing. A Sharia Deposit with Jago Syariah remains a wise choice to secure and grow your assets according to Sharia principles, whenever you begin.
Start your Sharia financial journey now!
