The financial market offers us a range of savings products – bank accounts, deposits and investment funds are available.
What will be better for us? What to choose without knowing the financial market or products offered by financial institutions?
Statistics show that we do not save regularly – currently, it is only about 8% of Poles.
This result is certainly influenced by low-interest rates offered by financial institutions available on the Polish market. However, it is better to regularly put aside money and have the right amount prepared for use in the proverbial “black hour”.
The average amount spent on holidays is nearly USD 4,000
When planning a vacation 12 months in advance, we have to save USD 335 a month in a savings account – we assume 1.5% per annum. After twelve months, we collect USD 4047.75, and thanks to this we have “earned” nearly USD 28. The component percentage effect does not look impressive in this case, because it is a short period and a low-interest rate.
However, if we would like to take a loan for such a holiday, after a year, the interest cost will be close to USD 470.
It all depends on how much money we want to save and in what period we want to spread our investment. Each of us has different needs and possibilities to deposit free funds in a bank account.
If we want to be systematic and set aside every month
We have two options – a savings account or a money market fund. A bank deposit will not be a good decision in this case – unless we monitor its termination or open a deposit only for a month. However, this will be a low-interest rate – 1.8% per annum.
For example – more and more often Clients decide to invest in a money market fund. These are safe and short-term securities – treasury bills, bonds or commercial bills. They are one of the most secure investment funds and are an ideal alternative to savings accounts and bank deposits.
The formalities are not complex, and we can earn much more on the fund than on the savings account – the fund has greater profit potential and, what is important, we do not incur any initial costs.
Let’s remember that both the savings account and the fund are flexible – we can deposit and withdraw money whenever we want. If the client’s plans change, he can spend the collected amount on something completely different than his previously dreamed vacation. By citing several options for regular saving, I show that it is not difficult.