It has been found that more savers have lost faith in the banking system. But the question is whether or not it is advisable to keep money under the bed rather than keep in the bank.
If you intend to place it under the mattress literally or just metaphorically do so, the answer is decided no. The Government has made it clear that it would not encourage savers to lose money in trouble from UK-based banking operations. But, even more importantly, keeping your money at home is a high-risk policy, since most household insurance plans can protect only a small amount of money.
In short, having your money in the bank is safer than at home. For one thing, banks carry insurance that helps you, in the event of fraudulent withdrawals or charges, to recover your money. Additionally, you have the opportunity to gain interest by keeping your money in the bank, which is not possible when you hold your money at home. So, if you think of saving money at home, start thinking about choosing where to create a bank account of yours.
Benefits of Keeping Money in the Bank Instead of At Home
- Less Urge To Spend
If you’re the kind of person to keep a lot of money in your home, then you’re likely to fight the urge to spend it pretty well. That said, you can place it in a bank account where it will stay shielded from view if you want to minimize the risk of dipping into the savings. While accessing your money in a savings account is a little less convenient than a wad of cash in your sock drawer, your liquidity is still excellent. So, if you ever need the money for an emergency or an unforeseen cost, it’s not hard to access the cash.
- Opportunity to Gain Interest
The opportunity to gain interest is one of the most relevant factors for keeping your money in the bank instead of at home. You remove the chance of earning interest when you keep your money at home; thus, your money will not grow at all.
- Your Money Is Insured
Another fundamental explanation of why you should keep your money in the bank instead of at home is that banks provide insurance covering your money if any of it gets robbed. So, you wouldn’t be responsible for any of that in the improbable event that someone would get access to your checking or savings account and withdraw or spend your money, and you would get all that cashback. If you were to get robbed at home and all the cash you saved at home stolen, would you be able to get it back? I am assuming the money is permanently gone.
- Automating Your Savings
Not only do you have to cash every paycheck you collect while you keep money at home, but you also have to have the discipline to put your savings aside and leave it to be. In the meantime, you can set up a direct deposit if you keep your money in the bank, which in many cases, would allow you to automatically break your paycheck between your savings and your checking account. So, you can raise the amount of money in your savings account without ever having to go to the bank to cash or deposit a check.
It is a much better choice to keep money in the bank than to save your money at home. There are quite a few advantages that your sock drawer or mattress can’t compete with, including the opportunity to gain interest, insurance cover, ease of access, reducing the urge to spend it, and automating the savings.