mrleech

I have posted this questions to a few of the SGClubbers. Got a few answers. Wanna hear from the rest of the people here. I am just checking on the concept rather than in practical terms.

I will put the assumption that inflation is ignored. Please explain why and how you arrive at your conclusion so it will be a meaningful discussion.

All posts made are of subjective nature by default, unless explicitly mentioned. I am afterall still human.



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Wize

No, interest rate too pathetic. Putting money inside bank is considered savings. If not, everyone will be investing.

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cutepetz

To me saving money in the bank is not consider investment.
I agree with Wize , Is more like saving.
Invesment is much more .. And the outcome too is more if you do good.

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djchris

You should consider inflation, value of money, rising costs, for your money.

$1 now is not the same as $1 five years later. The pathetic interests in a normal savings account does not even cover these factors. Hence I would say that it's not investment. In fact, of people just leave their money in the bank instead of investing it, I would say it's income erosion.

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Leocravensky

investing will mean to let your money make more money for you. Pure savings is just savings and is totally different from investing. You might get rich by just pure saving, but investing definitely enable you to rich there faster.

Leo~
Blog : leoandsong.blogspot.com

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CaRe

I would say that saving in a bank is hardly an investment.

wattovader

How does one get rich just by saving in the bank? :biggrin4:

mrleech

Hmm, interesting discussion so far.

Perhaps I should also share my POV.

In theory, putting something in and getting more out of it is considered an investment to me. So in theory, excluding inflation and other economic influences, putting your money in the bank and getting some interest out is considered an investment.

All posts made are of subjective nature by default, unless explicitly mentioned. I am afterall still human.



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GeneKoh

I agree... If we don't consider inflation and other possible devaluing economic scenarios, it's considered a very good investment due to its almost-ideal liquidity (ATMs, withdrawals, etc), yet able to generate some form of return on your deposits.

But though a very secure one in Singapore's context, it's considered a pathetic form of investment due to its rates of return...

Leocravensky

Lets say

A = invest 5000 dollars yearly @ 5% interest rate of return.
B = Save 5000 dollars yearly in the bank
C = Save 4000 dollars yearly in the bank
D = Spend every single cent

After 10 years.

A will have 65.6k
B will have 50.8k
C will have 40.6k
D will have no money

From this simple illustration, A who invest regularly will have more money then B who saves regularly. Its possible for someone who save in the bank to save up to a Mil or more when they save A LARGE AMOUNT regularly.

But if he invest it, he'll get rich even faster :biggrin4:

Leo~
Blog : leoandsong.blogspot.com

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scooby_one-point-six

Personally,

i feel dat putting money in the bank is just to accumulate enough wealth to do some investment, be it property, stocks, unit trusts, bonds and other investment tools. Put it simply, The savings account is really just for me to accumulate wealth to invest. So ill think that its considered a pre-investment activity? haha...

anyway i use the current account more than the savings account....

my two cents worth =D

mrleech

Heh, why everyone thinking of huge returns?

I am just exploring the theory behind bank savings as an investment. Someone asked me this so I am putting it up for discussion.

All posts made are of subjective nature by default, unless explicitly mentioned. I am afterall still human.



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yellowcoral

in theory, bank = low risk low return investment

hmmm... investment?

but the way i see it, if it's a form of investment, it gotta beat inflation rate.
since it doesn't beat inflation rate, i dun really call it investment...
it's more like parking the cash rather than have it sitting at home accummulate dust.
even buying Tbills is better than putting money in bank.

maybe now life is too good.
but when time is bad, i think bank is a good investment.

djchris

Not to go off topic here, but the only savings account I consider to be investing instrument is the UOB Gold savings account and UOB Silver savings account.

The 'interests' that I earned there is reaching 3 -4% already based on the gold and silver spot price. But of course, the risk is higher as well.

My DBS don't even hold more den $500. I don't mind let them deduct the $2 since I earn back more in my gold and silver savings accounts.

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mrleech