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Handling money
Is saving money still actually worth it?
You have saved CHF 20,000 in your private account. What now? Leave it there or move it somewhere else?
Question: I have saved more than CHF 20,000 in my private account. Does it make sense to leave the money there or will I end up saving myself poor?
Answer: Since the turnaround in interest rates last year, saving has become more attractive again. On average, bank customers benefit from an interest rate of more than 0.6 percent. In some cases, interest rates in excess of 1 percent are also possible. However, this only applies to funds held in savings accounts. If, on the other hand, your money is held in a private account, you will receive significantly less interest – if any at all. This is because many banks have not yet moved away from the policy of zero interest rates. It is therefore advisable to only keep as much money in your private account as you need to cover your daily and monthly payments and to move the rest to a savings account. It should be remembered, however, that banks set withdrawal limits and notice periods for funds held in savings accounts. For example, you may only draw amounts up to a certain level (e.g. CHF 30,000) immediately and have to provide notification in good time if you wish to take out higher sums – otherwise fees will apply.
In principle, it makes sense to have a cash reserve in your savings account in addition to the money held in your private account. Not only will this allow you to achieve short-term savings goals, but it will also mean you are able to cover any unforeseen expenses. At the same time, you avoid the risk of suffering a short-term loss of capital, as can be the case with investments such as shares or bonds. However, inflation gnaws away at your savings deposits over time – effectively "saving you poor" in the longer term. You should therefore not keep too much money in your savings account. Depending on the account holder's life situation and financial obligations, every household should keep an "reserve fund" of three to six months' wages in this account.
Tip: If you want to build up your assets over the long term, you would be well advised to invest part of your savings in shares or bonds, for example via funds. In the long term, these securities are attractive due to their higher returns.
The expert
Barbara Leo is a customer adviser at Migros Bank.
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