PaisekoJagaao – Don’t let your hard earned money waste away in your Savings Bank Account
Don't let your hard earned money waste away in your Savings Bank A/c
Every month we get salaries into our bank account. However, we leave our money for some time without paying any attention to it and take action when we have to make tax saving investments. This is called idle money, which earns a very small amount of interest. Should you let your hard earned money be idle in a Savings Bank Account? In this article, I will help you with some of the facts about idle money and how you can be smart in investing in investment options with #PaiseKoJagaaao concept.
How money in savings accounts is practically dead money?
You might get your salary into your SB account. If you are doing business, you might transfer some money to your SB account every month for regular routine expenses at home. However, we leave such money in Savings Bank account without knowing that it is kept as dead money. Most of the SB accounts provide you 4% annualized interest. E.g. if you earn earn Rs 50,000 per month as salary and you keep such funds for say 1 month in SB account, you are getting Rs 2,000 per annum or Rs 167 per month. Such small amounts are peanuts for you and your family.
How Inflation Rate is increasing year on year?
In plain simple words, an individual should think about how the inflation rate is increasing year-on-year to understand more about their hard earned money is lying idle. Here are some statistics about Consumer Price Index (CPI) which is used to calculate Inflation.
CPI for 2012 – 9.3%
CPI for 2013 –10.9%
CPI for 2014 – 6.37%
CPI for 2015 – 5.88%
CPI for 2016 – 5.71%
If you observe, in last 5 years, average inflation is over 8%. As an example, the value of an item which you purchased last year, you would have paid 8% more this year. Cost inflation is not just limited any specific industry. It includes monthly groceries, clothing, children's education, etc. However, college education and medical expenses are skyrocketing and its rising prices cannot be even imagined. In a recent study by one of the insurance company, health carecosts inflation is over 20% in the last few years. It is expected to rise over 15% in the next few years. Do you still think that interest on your idle money is able to combat such high inflation?
Paise ko Jagaao – Don't let your hard earned money lie in SB Account
Now you understand how inflation costs are increasing year on year. Don’t let your earnings lie in Savings Bank Account to earn some peanuts. You should study how many days / months you are keeping your money idle in SB account. Once you do your home work, you can consider various best investment options like good liquid funds or short term debt funds that can give you good returns. With some planning, you can make smart investments every month to get good returns on your idle money.
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Paise ko Jagaao – Don't let your hard earned money waste away in your Savings Account