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Compare Savings Account
Today the average person, whether they live in the Americas or
Europe, Australia or Hong Kong, are keeping their money in some sort
of bank account or other. However, there are numerous types of
accounts, and for this reason, it is important that we compare
savings account alongside other types of accounts.
For the average person there are usually only two choices of
accounts that they choose between. Usually they will have either a
saving or a checking account. Let us compare savings account
alongside a checking account.
With a savings account you simply have a place in which you can
"park" your money until you decide to do something with it. This
"something" can mean investment or it can mean withdrawing the money
and spending it, or simply "letting it ride," to use gamblers'
parlance. Gamblers are mentioned due to an important aspect that
most people with their money in an account rarely consider: that by
leaving their money in a traditional savings account, they are
losing their money by letting it dwindle to inflation and other
unsavory aspects of the pecuniary world.
To illustrate, let us take Boris. The (true) story runs that Boris
was a successful biologist in the former Soviet Union. While Boris
was not a rich man, he did well for himself, and shortly after the
Soviet Union broke up into Russia and other countries, Boris and his
wife decided to move to San Diego, in the United States. Now Boris
had a tidy sum of money in the bank that he didn't need to bring
with him, particularly as he had a friend that could've used the
money, Andrei. And so to Andrei the money went. Though not a
fortune, it was enough money to purchase a small motorcycle. Within
a year, due to the ravages of inflation, the same amount of money
was only enough to purchase an ice cream.
While this example may be a bit extreme, it is important when you
compare savings account to a checking account or other form of
account, for reasons that will be clear shortly.
When we compare savings account to a checking account we find that a
checking account is worse in that it offers no interest whatsoever,
but at the same time it does offer a bit of a buffer to making
payments, in the form of cheques. These tend to help not only in
making payments easier, but also when you're only two days from
getting paid, have no money in the bank, and have a payment that
must be paid today. (Of course, this is not recommended, as it is
absolutely illegal, though it does tend to happen, and to help.) So
the decision is yours. Choose wisely, or even choose to split your
money, open both accounts, and revel in the extra benefits.
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