Tuesday, May 4, 2010

Leaving your money in a bank is a bad idea?

Most Indian families have the bulk of their household savings and assets in a bank account. We believe that this is the worst thing that you could do for your money Not only are you not going to get rich like this, but you are actually losing money over the long run. Not to mention, the bank is taking advantage of your money to make money at your expense. Lets tell you more...

First of all, let us acknowledge that depositing money into a bank account is great because of the convenience and security that it offers us. Banks are a great mechanism to transmit money from your account to say your mobile phone company or your electricity provider or paying your children's tuition fees by cheque. You receive your monthly salary and that goes directly into your bank account. And this is where the problem begins.

If you want to know why this is a problem, its because of our inertia. Experience has shown that most Indian families don't do anything with their surplus money apart from leaving it in the bank account which is often because of a lack of financial awareness.

Also bank gives very low rate of interest, at  the least we can do is put our money in funds/FDs and get some more returns.

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