Should people take their savings out of the bank?

Each week, two teenagers debate a hot topic. This week ...

Anthea Wong, 16, Hong Kong International School

People often think it is more convenient and secure to put their savings in the bank. But in the current economic environment, with very low interest rates on deposits, it is better to take their savings out.

The interest rates are very low now because the government wants to stimulate spending to revive the economy.

For example, if people are buying things, then shops and restaurants can afford to pay salaries to their employees. This means a lower unemployment rate, which will gradually help the economy improve.

Hong Kong is not alone in having to do this. The entire world will need to do it to avoid a global recession.

There's another reason for withdrawing money from savings accounts: to pay off loans. The interest rates for borrowings are much higher than interest rates on deposits. Therefore, it makes sense to pay off loans and pay as little interest on them as possible.

All in all, in the current economic climate, it is better to use your money for constructive purposes.

There's no point in having your money in a savings account, where it is not earning anything.

Ronald Ling, 18, SKH Bishop Mok Sau Tseng Secondary School

With the financial system in turmoil, this is clearly a question a lot of people are thinking about. Just a few weeks ago, rumours were circulating the Bank of East Asia was going bankrupt, and depositors formed long queues to get their money.

It's easy to see how such rumours start. There has been a series of bank failures due to bad debt. It became clear just how serious the crisis was when Lehman Brothers went bankrupt.

But taking our money out of the banks will not help.

In fact, it might make the entire system collapse. Banks are required to hold a portion of deposits as reserves.

When people start withdrawing all their savings, banks have problems maintaining their reserves and will have to borrow loans. Eventually, they will go bankrupt.

This is why the government has strengthened the Deposit Protection Scheme. All customer deposits are now guaranteed.

With this measure aimed at reviving confidence in banks, the risk of anyone losing their savings is very low.

It is time to rebuild confidence in the financial sector so that it can provide a safe place for our savings and convert them into investments that are good for the economy.