It's money in the bank

PUBLISHED : Monday, 10 March, 2008, 12:00am
UPDATED : Monday, 10 March, 2008, 12:00am

Today, you broke your piggy bank! You did not spend the money. You have opened a bank account and deposited the money in it.

Well done! Bank accounts help better manage money. How? First of all, it is safer to leave money at the bank rather than keep it with you. The risks of losing it or having it stolen are lower. Besides, as money transactions are recorded in the bank's accounting system, you have proof of the amount you own.

Above all, it helps you lower your own risk of spending it. With less cash in your pocket, you will think twice before buying something expensive. You would have to go to the bank and withdraw money with the ATM card, which adds one more step to the process. This gives you more time to remember your budget and your saving goals.

But when you deposit money in the bank, is it still yours? Even though you can't touch the money, the bank owes you the amount in your account.

Banks will use this money by lending it to other people or companies.

They get an interest on the money they lend, which is always higher than the interest on deposits.