Is Your ATM Your Wallet?

By N. Mark Castro

 

It is quite safe to assume that most of you know what a Savings Account is.

You register your name with the bank (open an account), deposit money into the account, and leave it there in order for it to earn interest.

This does not require rocket science. You can, of course, take the money out of the account, but that defeats the purpose, especially if you want to save money.

So the question is: what is your savings account? Your wallet? Or a savings instrument?

To some, a savings account is a great way for people to save money and to earn some interest off it; to others, it’s an extension of their wallet.

A savings account is useful for those individuals who have limited amounts of cash to put away. Young people, especially younger married couples, often find that opening a savings account is the best way for them to save money.

Unlike some other types of investments — which demand a certain amount of money be deposited or maintained at all times, a simple savings account allows you to deposit whatever you like, whenever you like.

Another reason a savings account is handy for those with limited funds is that the money you deposit into the account can be withdrawn immediately if you need to get it. Again, some other types of savings or investments instruments are not this fluid. Most savings accounts allow you to use the ATM as well, which offers even greater access to your money should an emergency arise.

Savings accounts are also safe for your money in two ways. No one should keep large amounts of cash at home; that is simply dangerous to do. The money could be stolen or if there were a fire, the cash could be destroyed. In both cases, you would completely lose your money with (probably) no way of getting it back.

The second safety feature that savings accounts have, particularly in Indonesia, is that money that is deposited into a bank is protected by the Indonesian Deposit Insurance Corporation (IDIC) or “Lembaga Penjamin Simpanan/LPS,” which covers a maximum amount of 2 Billion Rupiah for each depositor. If the bank is robbed or the bank burns down, you will still have your money. Even if the bank files bankruptcy, your money is safe.

When you are ready to open a savings account, do some homework first. You want to find out which banks are offering the best interest rates and deal with those banks. You should also look into the minimum amount of deposit required to open a saving accounts. Some banks require a certain amount be deposited the first time in order to set up the account, as well as a minimum maintaining balance.

Remember, however, that keeping all of your money in Savings Account isn’t also wise; inflation is bound to catch up with your account, hence, the need to diversify your financial portfolio.

 

Note:

This post first appeared in http://www.liveolive.com and is the exclusive property of its parent company, Lysi Strata Pte Ltd. LiveOlive is the first and only comprehensive personal finance management site for women in Asia, providing an aggregation of interest rates, budget calculators, tools, and premium content. It is a community of women dedicated to discussing money in simple terms and in a fun way.

About Asmartrock

N. Mark Castro is the chief political communications strategist for PT AsiaLeads, a political and communications policy-making body based in Jakarta, Indonesia. He is also the Executive Director at the Southeast Asia Consulting Group, an investment advisory company assisting clients roll out their presence for the ASEAN Economic Integration in partnership with government. The views posted here are his own and do not in any way reflect the views of the companies he represents.

Posted on July 29, 2012, in General, Previous and tagged , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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