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Forex Strategy

How to earn maximum profit and income on IIS

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For the first time, Russian retail investors had the opportunity to open an individual investment account in 2015. In just five years of the existence of this tool, records for the number of registrations have been broken several times. And they wanted make money on IIS as novice investors, but also experienced ones. What kind of income can be obtained using such an investment account? Today you will receive an answer to this question.

How to get the most benefit from IIS

IIS differs from a classic brokerage account in the ability to receive tax benefits from the state. This is what attracts the attention of investors to himself. Many of them started their investment activities with a desire to receive a tax deduction. However, then they got carried away with the topic of investing and began to acquire assets in order to get more income.

Figure 1. Applying step-by-step instructions for using the IIS of an individual investment account, you can earn money with minimal risk.

Tips for beginners before opening IIS – how to make money

To become the owner of an IIS and get the opportunity to receive monetary profit with its help, you have to follow several fairly simple rules.

Step-by-step instructions for use – how to make money on IIS

First, you need to choose a broker who will open an IIS. Today in Russia brokerage services are offered by a large number of companies. However, the priority should be those of them that have been working in the market for a long time and have earned a reputation as a reliable provider of financial services, for example, BCS – this broker allows you to trade not only on the MICEX, but also on the St. Petersburg exchange, and open IIS online. All remote procedures (including the transfer of an individual investment account) are performed in a matter of minutes.

The investor will have to visit the website of the selected company (if, of course, it offers online registration) and draw up an application for opening an individual investment account. Broker representatives will contact you in 1-2 days and inform you about further steps. The procedure for opening an individual investment account is extremely simple.

The next step is to decide on the type of tax benefits. Investors currently have two options to choose from:

  • Type A. Allows you to receive a tax deduction in the amount of 13% of the part of the account balance top-up amount during the year. Moreover, for 12 months, each investor has the opportunity to receive no more than 52 thousand rubles. This type of deduction should be chosen by novice investors. To receive tax benefits, they need to replenish its balance after opening an account and annually issue a request for a refund of part of the tax paid. It is not necessary to engage in investment activities.
  • Type B. Allows you to exempt your future income from investment activities from tax. It is quite obvious that this type of deduction is beneficial for investors who are going to acquire assets and make money on them.
Figure 2. IIS allows both to dispose of the coupon income for earnings, and to choose any type of deduction.
Figure 2. IIS allows both to dispose of the coupon income for earning, and to choose any type of deduction.

The last step is to study the topic of investing and earning income from it.

More details on how to make money on an individual investment account IIS

There are few options for earning money using IIS. It has already been said above that for many investors, the only option for making a profit is a tax deduction. However, this option is not the only one.

How you can make money on IIA on tax benefits

It’s worth starting with the easiest way to work with an individual investment account. Thanks to the privilege provided by the state, investors can receive more than 150 thousand rubles in three years only thanks to the opening of the IIA. There are several steps to be taken for this:

  • Open an individual investment account with a broker.
  • Top up the account balance annually in the amount of 400 thousand rubles to 1 million. It is impossible to deposit more on the IIS in accordance with the current legislation. If the annual replenishment amount is less than 400 thousand, then the investor’s profit will decrease.
  • Submit an application for a deduction at the beginning of each next year within the next three years. It should be noted that a tax deduction can be obtained only if the individual investment account has existed for at least 3 years.
  • Close the account after the minimum period (three years) has expired and withdraw all funds.

Thanks to these simple actions, the investor’s capital can increase by 156 thousand rubles in three years. At the same time, it is not necessary to engage in investment activities. No bank deposit is able to bring such profitability.

Federal loan bonds (OFZ) to earn money on IIA

This method of generating additional income with the help of an individual investment account is suitable for investors who want to learn how to conduct competent investment activities. The easiest way to invest free capital is to purchase OFZs. The reliability of this asset is at the level of a bank deposit, and the average annual yield is about 9%.

For three years of work with the IIA from the moment of its opening, this profit-making scheme is available if the account balance is replenished annually by 400 thousand rubles and the purchase of government bonds to receive coupon income. How to dispose of the coupon yield on IIS is a simple question. So that the money does not lie just like that, it is advisable to reinvest it. However, if necessary, they can be withdrawn and spent on your own needs.

Investment portfolio – income on IIS

If an investor has set himself the goal of getting the maximum possible profit in the financial markets, then he will have to study the topic of investment well. Investing in stocks, bonds, ETFs and other financial assets can provide a good return. It is quite obvious that the higher the potential profit, the greater the risks of losing money. Thus, it is necessary to form your investment portfolio very carefully.

Figure 3. To get the maximum benefit from IIS, you need to earn with diversified investments.
Figure 3. To get the maximum benefit from IIS, you need to earn with diversified investments.

First, you need to decide on the acceptable risks. If you are ready to risk a certain amount of money, then you should pay attention to riskier assets. Some of them offer potential annual returns of 35% or more. If there is no great desire to take risks, then it is better to take a closer look at assets with an expected return of no more than 15% per annum. At the same time, one investment portfolio can contain both types of financial assets.

The second step is the competent distribution of financial instruments in the portfolio. You should NOT spend all your money buying securities of one company, even the most successful one at the moment. The best option is to acquire assets of different companies and countries. Thanks to such diversification, you can minimize the risks of losing all your money.

Quite often on the Internet there is a recommendation to transfer the IIS to trust management of professional traders. However, the expediency of such a step can be questioned. If only because this service is paid. It is possible that the commission paid by the investor will make up the majority of the profit received. However, only the investor himself should make the final decision.

Moris Akline
About author

Speculative operations in the foreign exchange and stock market. Work with futures and indices on CME. Work on FORTS and RTS. Development of portfolios and investment strategies for clients. Knowledge of technical (price charts of various types, indicators and oscillators, trends, channels, support / resistance levels) and fundamental analysis, take note of news. I work according to my trading strategy in compliance with the rules of capital management and risk management. Development of trust management strategies. Technique of order execution, placing and changing protective stop-losses, hedging.
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