Is saving at the bank the best idea?

Saving money is unquestionably a good decision. The question is which routes and methods to use for the best financial result. Most people save their money at the bank, rather than investing in the stock markets.

Storing your money in a bank is by far the most convenient method. For one thing, it is user-friendly. With the press of a button, you can transfer money from your checking to a savings account. Withdrawing money is effortless, and you are always up to date with where your money is via an App.

Even though the Bank is a very simple method of saving, it is not necessarily the best method. Here are some things to consider:


1. Safety of money; your money is untouchable at the bank.

2. Short Term Savings; you can save up quickly and then withdraw your money at any time.

3. Emergency funds; you have immediate access to your money. For instance, if your car breaks down, you have access to your savings right away.

4. Insurance; your money is federally insured, thus if the bank defaults you can claim back your savings.


1. Low returns; typically savings accounts struggle to beat inflation over time as interest rates are low. These low returns make saving at a bank a poor financial decision for the future.

2. Easy to Spend; due to convenience, it is very tempting to spend as you have easy access to your savings.

3. Insurance; as mentioned before, even though your money is protected, the claim back amount is limited.

4. Rules; banks limit the number of withdrawals you can make from your savings account each month and there may be fees for these withdrawals.

Taking all this into consideration, is saving at a bank the best financial decision for you? Other short-term savings options are more beneficial. A good alternative is a Money Market Fund.

Money Market Funds are short-term investments that offer sound returns and act as an emergency fund. Even though they are technically investments, they are easily accessible, thus they act more like on-demand bank cash accounts.

They may not provide as high return figures as investing in the stock market, but they are much more stable thus less risky and still tend to have better returns than an interest-bearing savings account (though, as with most investments, there is no guarantee on returns).

Here are some considerations to help you decide if a Money Market Mutual Fund aligns with your needs:

  1. Interest rates; if you want a higher rate of return than most interest-bearing saving accounts, but do not want to take part in the stock market.

  2. Timing; if you do not need daily access to your savings and your financial goal is to use this as an emergency fund.

  3. Access; if immediate access is not your biggest concern, as funds need to be transferred to your bank account before you can access the money.

  4. Risk; if you are willing to bear a little risk in exchange for a higher potential rate of return—money market funds aren’t insured and could incur a loss.

  5. Minimums; if you want to invest a small amount, this low-risk investment vehicle requires a low-to-no minimum balance – this is subject to differ among different investment houses.

If you want better financial results for your savings, contact our brokers at PBA for help and advice.

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Phone: 011 803 9686

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