What advantages and disadvantages are there to saving money in a bank – quora gas jet size chart

When it comes to saving money in the bank… I almost see it as pure lost. Banks give like 0.001% or 0.003% on most regular savings accounts. If you want to do better than that then you could open an account with Barclays. They will give you 1.19% back on the money you keep on a savings account you make with them.

A better investment probably is to try peer lending. Peer lending results vary… some people get 6%, other get 8%… others get 14% or more. It depends on multiple factors. The most important one is that you get paid back what you loaned since lending money at an interest always carries a risk. If you do try peer lending stick to the offers that will lend $25 to multiple people. This way, even if there are some people that don’t pay the money back you will still likely get big returns on your investment. Never lend $10,000 or more to a particular person using peer lending because is just too risky. Here is an article on Forbes talking about peer lending and returns on investments.

You already faced them during demonetisation period. Something similar or even worse can happen. For example during the Greek crisis, Banks were shut for more than a week, and the common man could not even access his own money. If such a thing happens here, or in case of a war, severe restrictions and rationing are brought here for withdrawals,what will you do, in case you have to admit someone in your family in hospital or other such emergencies? Of what use is your money, if you are in no position to access them. All this so called Cashless development, may sound fine, but in a crisis you are the sufferer.

So, as long as I am concerned, I have full control and discipline over my expenses, and hence prefer to keep my cash with myself, where I can lay my hands on it. I would only keep it in a bank via a fixed deposit. Issue cheques where necessary, and periodically keep only that much amount that is necessary to pass those cheques over and above the minimum balance.

I expect a big border skirmish in late 2018, or early 2019, and I would like to see what kind of restrictions on banking this Govt is going to bring. Too much reliance on Cards in the name of convenience is also not good. I have had cousins in the US telling me that during Hurricane Katrina in the US, they were so used to living on cards that, there was no power for 3 days there in many areas, they had no cash in hand, not could they even withdraw from the ATMs. It came as a big eye-opener, that they now ensure that they always keep some cash at home for emergencies.

The major advantage is a psychological one. By saving you train yourself in the discipline of accumulating (and not spending) your wealth. This runs counter to every opportunity for gratification that society offers. That discipline is one of a very few positive things that you can develop in your life to assure stability and independence. It carries forward into your life to weigh every consumption decision.

If you save toward an accumulation goal, you eventually come to realize how incredibly difficult and time-consuming that accumulation process is. When you have completed that accumulation and face the decision to spend (which is, after all, why you accumulated), your first thought must be that when you spend your savings you have less than nothing. You no longer have your wealth, but you have a thing. That thing will incur additional cost to maintain or use – what good is a TV without purchasing content? A car without oil? A home without water? So you are actually less wealthy than when you began, and you incur new obligations which you may or may not feel inclined to meet.

As many have pointed out, your spending power will erode from inflation while you accumulate it. The account itself may be costly, with monthly or annual fees and minimums that eradicate any interest benefit. You must research the bank that you save at to ensure its stability in time of chaos so you don’t simply lose all your savings.

Saving money may be exactly the wrong thing to do. In a practical sense, if you carry any debt then you should be working to discharge that debt before saving money. (This is not always possible.) That debt is far more costly than any benefit you receive from savings. Yes, there are obstacles. But if you carry a credit card balance at usurious rates it makes little sense in most cases to set that potential payment money aside in a savings account. Both are investments clamoring for your dollar/Euro/ringgit/renminbi/rupee. You must carefully consider the relative benefit from each kind of investment.

Once in the bank, your money is no longer yours – it is the bank’s money, which it may or may not elect to return to you at your demand. Every account agreement gives the bank the right to limit your withdrawal at any time, and for any reason. Even if you have “deposit insurance” on your money, you may lose access to it for some considerable time if your bank becomes insolvent, during the time it is absorbed into another institution. You may lose interest payments during that transition, or incur additional costs.

So the practice of saving, once developed, is a lifelong benefit. But savings must be created in the context of an overall financial plan which includes all of your debts and obligations. You must take reasonable care and judgment when selecting your savings institution.