---
title: Understanding and Optimizing your Severance Compensation - Elaine King - Family and Money Matters
description: Saving and protecting your money are basic activities that will help you achieve
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# Understanding and Optimizing your Severance Compensation
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Saving and protecting your money are basic activities that will help you achieve financial stability. Protecting your savings is very important and it consists of knowing the loans that you have the right to as an employee of a company or corporation.
The idea of the severance compensation fund is to provide the employee with a sum of accumulative money for each year of work. It’s an intangible fund that you can use in an unemployment situation.
Your employer has the obligation to deposit your severance compensation twice per year during the months of May and November, and also has the responsibility of informing the financial institutions what your salary is to calculate the amount that’s available to you. The amount to be deposited is a half month’s salary, totaling one month’s salary per year.
**Freely Available**
Due to the fact that this fund is essentially made to solve an unemployment situation, you won’t have the entire fund available to you. To calculate the amount that’s available to you, multiply your monthly salary by 6; the excess amount is the amount you can withdraw. For example, if you earn 2000 soles per month, the intangible amount is 12000 soles; and if you have 14000 soles in your account, the extra 2000 soles are available to you.
**Accounts**
Almost all financial institutions have different options for you to deposit your severance compensation and they are usually free. You can generally withdraw an available amount. The most important thing before deciding what institution you’ll use to save your compensation fund is considering each of the institution’s interest rates, so the amount you save can grow year after year.
**Deposit Insurance Fund**
Protecting your investment is paramount, and few people know what financial institutions offer savings protection insurance. In Peru, most financial institutions offer this benefit and it covers around 90,000 soles. Since this amount changes every month, we recommend that you visit this site periodically [http://www.fsd.org.pe](http://www.fsd.org.pe/).
Because you work so hard for your money, invest time in getting to know your rights, benefits and investment options. Remember that protecting your savings is a vital activity to prevent future headaches.
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