Savings account is a simple traditional bank account where money is saved with a fixed rate of interest. Liquid assets refer to your properties, both immovable (homes, land), and movable (furniture, vehicles, etc.). By selling assets, its value is converted to cash or the ‘liquid’ form, meaning you can use it directly in the market.
So if you are trying to save money, you can either save it in liquid assets, or you can opt for a savings account. In most cases, going for a savings account provides many advantages over liquid assets.
• Savings account give you interest at fixed rates on the money you save in the savings account. More you save, you get more returns as interest, effectively increasing your funds. This is the greatest advantage of a savings account over liquid assets.
• Savings accounts have a small minimum balance requirement, which means you can start saving with a small amount of money and keep adding to it as you save along. The interest you get also multiplies your funds.
• Savings accounts do not need a fixed rate of saving money. You can deposit whatever little amount you save in your savings account anytime you want to save some money, adding to your funds little by little.
• As the saying goes, ‘Little drops of water make up the huge ocean’, saving your money in a savings bank account slowly builds up your funds over time into a considerable amount. During emergencies, this money is readily available to you in bulk to use however you need to.
• Interest on money deposited in savings accounts is tax-free up to a certain amount.
• When kept in liquid assets, money is more likely to be spent easily. If you had been saving it for an emergency, spending it on something tempting would not be a very good decision. When kept in a savings bank account, your money remains yours, but you are less likely to spend it on a whim.
• Saving your funds in a savings bank account protects your money from untoward incidents. Liquid assets may be stolen, may be lost or misplaced, or may be vulnerable to calamities like natural disasters. This can be devastating, especially if the money you saved was for emergency purposes.
When stored in a bank, your money is safe and secure, giving you complete peace of mind.
Therefore, if you are looking to save some money, savings accounts provide a far better option than liquid assets.
So if you are trying to save money, you can either save it in liquid assets, or you can opt for a savings account. In most cases, going for a savings account provides many advantages over liquid assets.
• Savings account give you interest at fixed rates on the money you save in the savings account. More you save, you get more returns as interest, effectively increasing your funds. This is the greatest advantage of a savings account over liquid assets.
• Savings accounts have a small minimum balance requirement, which means you can start saving with a small amount of money and keep adding to it as you save along. The interest you get also multiplies your funds.
• Savings accounts do not need a fixed rate of saving money. You can deposit whatever little amount you save in your savings account anytime you want to save some money, adding to your funds little by little.
• As the saying goes, ‘Little drops of water make up the huge ocean’, saving your money in a savings bank account slowly builds up your funds over time into a considerable amount. During emergencies, this money is readily available to you in bulk to use however you need to.
• Interest on money deposited in savings accounts is tax-free up to a certain amount.
• When kept in liquid assets, money is more likely to be spent easily. If you had been saving it for an emergency, spending it on something tempting would not be a very good decision. When kept in a savings bank account, your money remains yours, but you are less likely to spend it on a whim.
• Saving your funds in a savings bank account protects your money from untoward incidents. Liquid assets may be stolen, may be lost or misplaced, or may be vulnerable to calamities like natural disasters. This can be devastating, especially if the money you saved was for emergency purposes.
When stored in a bank, your money is safe and secure, giving you complete peace of mind.
Therefore, if you are looking to save some money, savings accounts provide a far better option than liquid assets.
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