Savings and goals
Everyone has savings goals but is saving suitable for achieving them and aren't interest rates too low to beat inflation?
Savings: the best way to achieve your goals?
Saving is a familiar way to set aside money for future goals. But in today's economy with low interest rates, is it still the best choice? In this article, we discuss the pros and cons of saving, the different forms of savings and alternatives you can consider.
The benefits of saving
- Safety: Savings are guaranteed up to €100,000 per person per bank by the Deposit Guarantee Scheme.
- Stable return: Savings accounts offer a fixed return, although it is currently very low.
- Liquidity: You can access your savings at any time.
- Simple: Savings is easy to understand and manage.
The disadvantages of saving
- Low interest rates: Interest rates on savings accounts are currently historically low. This means that your savings have little or no increase in value.
- Inflation: Inflation is higher than the savings rate. This means your purchasing power decreases when you save.
- No risk sharing: Your savings are completely concentrated in one asset class, which increases risk.
Savings forms
There are different forms of savings, each with its own characteristics:
- Savings account: The most well-known form of savings. You deposit money into an account and receive interest on it.
- Deposit: You deposit money for a fixed period and receive a higher interest rate on it.
- Savings mortgage: You save money in a special account linked to your mortgage.
Alternatives to saving
If saving is not the best option to achieve your goals, there are several alternatives:
- Investing: Investing involves more risk than saving, but also offers the chance for higher returns.
- Crowdfunding: Investing in projects or businesses through crowdfunding platforms, fun and educational but perhaps very risky.
- Bonds: Corporate loans can provide excellent returns, but they are interest rate sensitive.
Tips for smart saving
- Determine your savings goal: What do you want to achieve with your savings?
- Make a budget: Decide how much you can save per month.
- Compare savings accounts: Choose the savings account with the highest interest rate.
- Save automatically: Make an automatic transfer to your savings account.
- Combine saving with investing: Consider investing some of your savings for higher returns.
Saving is a safe way to put money aside, but is not always the best way to achieve your goals. In today's economy with low interest rates, it may pay to consider alternatives such as investing.
Savings and goals
Everyone has savings goals but is saving suitable for achieving them and aren't interest rates too low to beat inflation?
Savings: the best way to achieve your goals?
Saving is a familiar way to set aside money for future goals. But in today's economy with low interest rates, is it still the best choice? In this article, we discuss the pros and cons of saving, the different forms of savings and alternatives you can consider.
The benefits of saving
- Safety: Savings are guaranteed up to €100,000 per person per bank by the Deposit Guarantee Scheme.
- Stable return: Savings accounts offer a fixed return, although it is currently very low.
- Liquidity: You can access your savings at any time.
- Simple: Savings is easy to understand and manage.
The disadvantages of saving
- Low interest rates: Interest rates on savings accounts are currently historically low. This means that your savings have little or no increase in value.
- Inflation: Inflation is higher than the savings rate. This means your purchasing power decreases when you save.
- No risk sharing: Your savings are completely concentrated in one asset class, which increases risk.
Savings forms
There are different forms of savings, each with its own characteristics:
- Savings account: The most well-known form of savings. You deposit money into an account and receive interest on it.
- Deposit: You deposit money for a fixed period and receive a higher interest rate on it.
- Savings mortgage: You save money in a special account linked to your mortgage.
Alternatives to saving
If saving is not the best option to achieve your goals, there are several alternatives:
- Investing: Investing involves more risk than saving, but also offers the chance for higher returns.
- Crowdfunding: Investing in projects or businesses through crowdfunding platforms, fun and educational but perhaps very risky.
- Bonds: Corporate loans can provide excellent returns, but they are interest rate sensitive.
Tips for smart saving
- Determine your savings goal: What do you want to achieve with your savings?
- Make a budget: Decide how much you can save per month.
- Compare savings accounts: Choose the savings account with the highest interest rate.
- Save automatically: Make an automatic transfer to your savings account.
- Combine saving with investing: Consider investing some of your savings for higher returns.
Saving is a safe way to put money aside, but is not always the best way to achieve your goals. In today's economy with low interest rates, it may pay to consider alternatives such as investing.
