There is an old saying that ‘cash is king.’ This may have applied years ago when technology was simpler, but the fast-paced life of today makes paying with cash difficult and even unsafe. Rather than taking the chance of leaving cash at home or carrying it with you, using a bank account is the way to go.
Nitesh Patel, Head of Inclusive and Middle Markets at Standard shares 8 advantages to having a bank account:
Your money is always safe
Storing your money in a secret place at home isn’t as safe as you might think. There is always the chance that an intruder could steal your hard-earned savings. Then there are other problems that could lead to a loss; what if there is a fire at home? A card in a drawer may be destroyed, but it can be quickly replaced – money can’t.
It’s the best way of getting paid
Every time your wages are paid in cash you run a risk. Dishonest people can figure out when you are paid, so walks home or rides in taxis on a weekend can become high-risk situations. More and more employers are also refusing to keep money on their premises as they know that they can be targeted. Money paid into an account means that your money is immediately available to you and safe from would-be criminals.
It’s the best way of looking after your money
Every card must be operated with a personal identity number (PIN). If you don’t tell anyone your number, your account can’t be accessed and your money stays where it is.
Even better, you can reduce your losses in the event of crime, or of somebody learning your PIN, by setting a daily limit on your card. This means that once a certain amount (R1 000 for example) is reached in a day, no more transactions can take place on that day.
If you lose your card, a simple phone call makes sure that it is blocked and can’t be used.
A messaging option on an account also lets you know when money is taken from it. You will know how much is withdrawn and where it goes. So, if you have allowed a family member to draw money, you will know just when it happened. If the money is taken by an unauthorised person, you can have the account stopped.
It’s the best way of keeping track of what you spend
Many people get to the end of a month and can’t explain just how they spent their wages. With a bank account you get a statement that can be referred to whenever you like. You can find out exactly what you spent and even when you used an ATM to draw cash.
You can get cash whenever, or wherever, you need it
If you have a card account (a debit card), cellphone top-ups, electricity top-ups, cash, and even cash transfers are as close as your cellphone or an ATM – all day and night. If your account is linked to your cellphone, you can use a banking app or cellphone banking to move cash to friends or family.
It’s the best way to get government grant payments
These days, government agencies don’t make cash payments, so having an account is a requirement if you are to receive a payment.
Getting interest on your money
Cash that is hidden at home never earns interest, but savings in a bank account do, so your money grows over time. The longer it stays in an account, the more your money earns.
Interest rates change, but the rule is that the more you save, the more interest you earn. When you open a savings account you should find out what interest is payable and when it is increased. Every account has set limits. When you go over this amount, you earn extra interest.
Getting interest on your interest
Over time, the magic of ‘getting interest on your interest’ starts working for you. Called ‘compound interest’, this happens when your money has been in an account for a long time. Your money earns more interest the longer it is in the account. The money you have received from the bank increases the amount you have in the account and you are paid interest on this new amount. Over a long period, your money can actually double. You don’t have to do a thing except put money in the account, as this happens automatically.
“The most important thing about having a bank account is security,” says Mr Patel. “Keeping your money safe and being able to draw cash whenever you need it is better than finding yourself far from home and unable to access your money in a financial emergency.”
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