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Is It Wise to Save Money in the Bank?

Most of the little money I saved is deposited in a bank but I wonder if it is still worthwhile to do so. I put my money in the bank mostly for safekeeping purposes only. When I was young I was taught to save my money in the bank. My heart leapt with joy when I as a young child saw my small savings grew because of the good interest it earns courtesy of the bank.

Times have changed however and bank interest earnings have dwindled to insignificant levels for their clients like me. Whatever insignificant interest earnings I get are further gobbled up by bank account maintenance charges.

Things have gotten so bad for me that my bank account maintenance charges are even bigger than my bank interest earnings. I am practically paying my bank to invest my money for the bank to earn from it. This is how bad things can get when you put your money in the bank.

I could have tried to put my money in term deposits where it would earn higher interests but I doubt if my interest earnings would even be enough to cover my bank account maintenance fees.

You will also be unable to touch or withdraw your term deposit for a set period of time and have to inform the bank if you intend to do so. This for example is a new law instituted in Australia in 2018.

This law clearly favors the banks not the depositors who are left with no option but to withdraw their term deposit savings or face a situation where they would have no financial assets to tap should a big emergency arise.

I could also go for a No Account Maintenance Charges account so that I would not be charged with account maintenance charges. These types of account however charge you in other ways. They charge you on the bank transactions you do and if you are not careful you could be paying more.

There is also the depreciation of the value of money. As time passes most often your money buys less and less goods in terms of value. This is not only happening during the Covid 19 pandemic but for a long time now. I notice that the bread we buy for example have significantly become more expensive but its quality and quantity have not improved at all.


Conclusion

The news today abounds with people withdrawing their money from their banks, retirement and pension funds to invest in the stocks, forex, real estate and so on markets. They are warned that these are risky investments and they might lose their money.

A lot of people however now know that putting your money in banks is a risky investment too because your money can slowly be eaten away without you even noticing about it.