5. Savings and Investments

Savings in Banks and Investments:
Savings are defined as the part of a consumer’s disposable income that is not used for current consumption, instead kept aside for future use. Banking facilitates saving money through various forms of accounts.

 

 Savings

 

1. Student Savings Account - Mainly for young people, banks offer more flexible terms such as lower minimum balance requirements.

 

2. Savings Deposits - Opened by customers to save part of their current income. The bank offers some interest to this saved money, and the customer can withdraw their money when they require it.

 

3. Current Account Deposit - Current accounts are generally opened by business firms, traders and public authorities. The current accounts help in frequent banking transactions as they are repayable on demand.

 

4. Fixed Deposits - Fixed deposits are meant for investors who want their principle to be safe and yield them fixed yields. The fixed deposits are also called 'Term deposit'.

Benefits of Savings
• You will be financially independent sooner.
• You would not have to worry about any unforeseen expenses.
• In future, you will have a financial backup in place if you lose your job.
• You will be prepared if your circumstances change.
• You will be more comfortable in retirement.
• Save today for better tomorrow

 

Intensity to save among the students
• Teach them about taxes and accounting.
• Involve them in grown-up money decisions.
• Encourage them to apply for a scholarship.
• Help them with a budget and apply for student loans.
• Teach them personal savings.

 

Investments:

Investment can be made in different investment vehicles like,
1. Stock
2. Bonds
3. Mutual funds
4. Commodity futures
5. Insurance
6. Annuities
7. Deposit account or any other securities or assets

 

Investment always comes with risks of losing money, but it is also true that you can reap more money with the same investment. It has a productive nature that helps in the economic growth of the country.