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  • Category: Miscellaneous

    How to save money in a safe manner?

    We all know that as savings is very important many people save their hard-earned money in various ways. Fixed deposits, Recurring deposits, and other investments in banks are the safest way in parking our money although the interest rate is not very impressive. Some people also buy gold and property.
    However, I am discussing here the amount of saving a small amount of money say one thousand to five thousand. I would be interested to know about other safest ways of savings so that we can use them when any emergency arises. Please discuss.
  • #766688
    We can save on anything except time. Time has to be utilised fully well. Unused time does not get saved. For all other things savings can be made from unused portion. That may help us later if properly used.
    In the earlier days when generally all were poor, our mothers used to save a handful of grain from the daily used portions and keep them apart. This saved grains used to come handy at times' of adversity like bad weather, lack of sufficient income, shortage of grains etc. etc.

    Our traditional wisdom used to teach us the significance of savings. It is only later and recently that people are attracted by the new economic theory of spending and borrowing. But a recession in between had again reinforced the need of savings.

    Savings should start as household saving.
    A small amount of cash should be saved and kept at home for any immediate use. The next savings should be as a savings account in a bank. Once the savings bank balance reaches an amount sufficient for half a month's normal household essential expenses ,further amounts can be saved as a recurring deposit for a middle term of say one year or three years. The amount maturing from RD can be re-deposited as fixed deposits. Whenever further surpluses happen depending on the amount they can be used for RD if available regularly or as fixed deposits if the amount is a n time lumpsum.
    The best way is to immediately park the surplus amounts in savings bank account and then transfer to the other deposit accounts.

    Once the total of the bank deposits reach an amount sufficient for six months expenses, other ways of savings and investments can be thought of.
    However whenever we think of saving the main point ne should consider is safety ,liquidity, return, deposit period as per our future needs.
    The above is my personal suggestion and I have benefited from the practice of the method.

    PS. I had written about saving and habit of saving at different contexts and posts in this site. You may read my response to this article where I had given my personal experience.
    Also please read my response post#136728 in this thread

  • #766693
    Thank you for the above post. I have also been following this type of saving method for the past one year.

  • #766694
    We can save small amounts in SB Accounts or Recurring deposit accounts in the Post office or in any good bank. We should always have some money in our SB accounts for meeting emergencies and unexpected expenditures. RD deposits can't be withdrawn in between the tenure. So after keeping the required money in the SB account we can think of starting an RD. Further, if we have additional money we can think of opening fixed deposits in banks. Even though the rate of interest is less for FDs, it is safe to keep these amounts in a bank or PO as FDs. People may go for investments in other instruments also where the returns may be more but it is not safe and some risk is involved.
    Small amounts can be invested in SIP in mutual funds so that we may get some reasonable interest but you may not be able to withdraw the amount as and when you want to withdraw the same.

    always confident

  • #766701
    Yes, we should park some money in some saving accounts initiated in a post office or still better, we can operate recurring deposits of some denominations suiting to us for some period so that the ultimate corpus grows into some handsome amounts. Such savings can be useful in many ways and can be spent as per our needs. If there is not the immediate plan of spending the same, we can go in for the fixed deposits from some secured banks for some specific period so that such funds can be used later in the hours of needs.
    Of course, saving is always a healthy practice and we can teach our youngsters regarding its proper utilities.

  • #766702
    Buying gold is a safe investment. Investing in Real Estate can be a risk.

  • #766712
    Saving money is a very important thing for shaping the financial objectives of our lives in future. Many people think that there are some investment avenues where returns are good and they should invest all their money in that. But this is not a correct thinking. Actually more returns are generally associated with more risks. So the safety of the principal amount remains a question.
    It is better to invest and save for future in safer investments like Post Office, Banks, Govt schemes etc. That would be a safer way to keep one's money for future. Though returns will not be very high but safety of principal amount will be taken care.

    Knowledge is power.

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