The recent financial crises all over the world and the collapse of varied banks have decreased the faith of the general public in the banking system. A lot of us feel that our cash is no longer safe in the banks and many have even reverted to the age-old strategy of keeping our money at home. Thus arises a major question – Should cash be saved at home?
The bed or the cupboard is not a great place to store your cash. Savings a large amount of money at home is a bad idea due to the below-listed reasons:
- Cash in the banks earn an interest, which increases the overall amount of money saved. Cash saved at home does not earn any interest. Also, over a period of time, money kept at home tends to lose its value due to the effects of inflation. A dollar kept at home will lose its value and hold less value than a dollar after a few years.
- Money stored in the house is generally not covered by most insurance companies. Thus, if the money gets stolen or gets destroyed by insects, water damage, fire, etc., then it is often not covered by insurance. Such money in the house is thus lost forever.
- Money at home can be easily accessed. It, therefore, encourages frivolous and easy spending on things that we do not actually need.
- Cash kept at home is always under the risk of fire, or theft, etc.
There is no better place to keep your savings than a bank. The primary reason for it is the fact that savings in a bank are insured and protected and the chances of you losing it are minimal.
Different options of storing money
A bank account has to be opened to be able to save your money in the bank. Bank accounts can accommodate every sundry daily requirement. Different savings account that you use only for saving cash, and not for everyday expenses, can also be set up by individuals. Such cash will keep earning interest and increase in value.
There are many kinds of bank savings accounts that can help keep the money in. Storing the money in fixed deposit accounts for a long time can help earn a higher rate of interest.
Opening a savings account in a bank, credit union, or other financial institutions is usually free. All assistance will be provided by the staff at these places.
Storing cash at home is not a good option as it comes with a great risk of losing the money.
Saving cash as an investment
There are not many good places at home that you can store your money in. Keeping cash under the mattress in the bed is the most risky as it is the first place that robbers search for money. If you are skeptical about saving money in a bank, then you can keep some savings in banks and use the below-mentioned options to save money:
- You can invest the money in real estate, stocks, or some business
- You can purchase gold or jewelry
- You can buy government bonds