Saving Your Money

Savings are funds that you set aside and do not spend. For instance, if you make a certain amount of money over a given period of time, the money that is left over at the end of that period is your savings. People usually deposit this surplus into a separate bank account to make it simpler to keep track of, while others choose to let it remain in their current account. Banks tend to have special savings accounts with incentives like higher rates of interest in order to encourage people to save money that the bank itself uses in order to provide the loans and lines of credit that they offer.

According to economists, savings are like leaks from the everyday cycle of money flowing between buyers and sellers. For the Government, a habit of saving is worth promoting to the public since more money saved means less money is in circulation, which actually results in lower inflation rates.

Choosing between interest terms...

The overall amount your savings will earn also depends on whether you are receiving daily, monthly or annual interest.

Daily interest is based on your account’s total balance at the end of each day. After calculating the interest, this is applied immediately to your account. Monthly interest is usually based on the lowest balance of your account for the month, while annual interest is paid every year.

The type of interest payment to choose will depend on how you want to be able to access your funds and how often you plan to make deposits.

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