Savings account is not for investment

Hello friends,

I am doing good, and I hope that you are having a good time with your near and dear ones.

We all should do the investment because it is necessary for us to grow the money. There can be multiple reasons for doing the investment but wealth creation is the primary reason. I expect this is also the reason for many others. There is a term called inflation and it is applicable everywhere in the world. This exists in every country with different percentages but I don't think there is any country having no inflation at all.

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What is Inflation?

This is a terminology that reduces the value of currency with time. You can have the same amount of money but it will not be the same value after some time because of this inflation. The process that devalues the monetary value of the Fiat currency is called inflation. This percentage can vary in different countries. It's around 6-7% in India. Even in the same country, the inflation percentage keeps on fluctuating.

A Saving account is not for investment

We open saving accounts to keep the money. Are you saving accounts to use the money for different purpose including the online payments and online shopping via digital payment? After the pandemic majority of shops and online portals are accepting digital payment using UPI and different payment wallets. A savings account is necessary to keep the money inside it that can be used for making the payment. A savings account is never an account for the investment because you are not earning anything. In India, the interest on savings accounts is so low that it cannot even match the inflation number. For example, I get 2.7% with my account and inflation is on the rise between six to 7%.

If you keep your funds in the saving bank account and expect a good return then you are mistaken because your money is not earning anything. What you are earning is not even able to manage the inflation so you are just losing the money. The number will be same that you can see in your bank account but if you look around then you will notice the difference that things are getting expensive.

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We need to change our thought process with a savings account because it is an account that can be used for keeping liquid money. Nowadays we have some mutual funds for liquid money also but still saving account is not a bad idea. Keep the amount that you want to use anytime for different regions but never keep the money that you are planning to invest in something. Investment is for the long term which means if you invest in something then just stay invested for the next few years or whatever your plan is. Have an investment strategy before putting in the money because later changing the strategy might count with a cost.

I keep some liquid money in my savings bank account and the rest I invest in different components. I buy gold and also invest in mutual funds. I don't read in share market because I don't know much about this market and I'd avoid anything that I don't understand well. I am new in this crypto market but I don't know about the trading but this is a learning area. For me, the savings bank account is just a bank account where I can keep the money for anything urgent or the money that I can use in day-to-day life. I first take out the money for investment from my monthly income. The remaining funds are used for daily and monthly expenses and there is no connection between the savings of my expenses.

Thank you
Peace @mukund123

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