People solve the problems of storing free money in different ways, but in most cases it comes down to banks and home. It would seem that the second option may be the most rational and safe, but in fact it is not. The inappropriateness of this storage method is confirmed by the following arguments.
1. Money doesn’t work
Money not invested in circulation is a direct waste. It is not at all necessary to invest in risky securities and stocks, but a savings account as such will certainly bring income.
Let it be a small amount at a rate of about 2% per annum, but we are talking about guaranteed replenishment of the wallet. Moreover, if necessary, this money can be withdrawn at any time.
2. The risk of losing money
Even if you omit the possibility of earning in a savings account, the accumulated amount in free storage can simply be lost. This can happen by accident, since no one is safe from theft, climatic disasters, fire, etc. These risks must be calculated and weighed together with the value of the stored amount.
In accordance with the recommendations of experts, in principle, modern man should have free money in his hands in an amount sufficient to cover weekly expenses in the normal mode of spending.
3. Inflation
What makes all kinds of deposits and even a savings account good is that at least they can become a safety cushion in case of high inflation. If capital does not grow in any way, given the rise in prices, this means that the owner literally loses in his purchasing power.
For a clear illustration, you can take modern 1000 rubles and remember that you could buy it 10 years ago. Obviously, the difference in value of the same bill at different times will be impressive. Exactly the same depreciation, but not so tangible, happens every year with money that is stored at home.
4. Unknown stash
There are times when people who keep money at home do not tell anyone about it. After the tragic events, they take this secret with them. As a result, their loved ones, over time, either accidentally learn about such hiding places, or do not at all, although they know that a relative should have had considerable amounts of financial resources.
The situation is unpleasant in many respects, so you need to insure against it. And the same bank in this case will not be the worst decision.
Financial literacy does not at all imply an irresponsible investment of money in order to protect it from theft or depreciation. This is not true. On the contrary, people who decide to keep money at home are initially careful when handling money, which in itself indicates their responsibility for financial well-being.
But they also underestimate alternative ways of storing money. In the same vein of maximum security, it is quite appropriate to consider a savings account. Especially when it comes to the long process of accumulating the amount, which only after a few years should be spent through a large acquisition.