In A Bank or At Home: Where Should You Keep Your Money

Money in the bank or at home: Which is better for you?


We all know that developing a habit of saving money will bring us more benefits than downsides. An equally important aspect of personal financial management is to think about where you will be keeping your money.


Although having cash on hand has its occasional benefits, saving money in a bank account will bring with it advantages cash savings cannot provide. In this article, we’re going to touch base on some points people often don’t think about. Let’s look at a few differences to fully understand the benefits of both while also explaining the advantages of different bank account types!

Understanding Different Types of Accounts

Often, people have the misconception that keeping money in an account is a bank’s way to take their money. However, that is no more than a myth. Truth is, understanding how these different accounts work can assist and lead us to cultivate better financial management. Wouldn’t you want that? But before we dive deep into the benefits, let’s begin with the fundamentals so that you have an idea of how these different accounts can help you.

No. 1:

Savings Account

It is obvious that the purpose of owning a savings account is to save. Simple, we all know that! However, there’s a more crucial purpose we don’t often think of. When we keep a stash of money at home, it’s difficult for us to distinguish between the money we can spend and the money we should save. With a lack of self-discipline (and our temptation to spend), we might never really see our savings grow the way we want it to be. However, when we give a ‘role’ to our money such as ‘savings’ and ‘spending’ that’s when we can differentiate the purpose of our money between the two. Now that we know where to place our sum for savings, where should we keep our portion for spending? This brings us to our next point, the current account. 

No 2:

Current Account

You may allocate the remaining sum of cash that’s meant for ‘spending’ under the current account. Ideally, you should allocate a total of 80% out of your total income (30% for wants), (50% for needs). As Cambodia is slowly accepting online and contactless payments, you should also start adapting to a safer, more secure way of performing your transactions. A way to do that is paying via a debit card. Usually, when you apply for a current account, a debit card is given to you. This card is linked to your current account and as you spend, the money will be deducted from your account. In short, you’re spending your money through a card.


Do you have a better idea to where we’re heading now? By separating your money between the savings and current account, you can spend as you please without having to worry that you’re compromising your savings.

No 3:

Fixed Deposit Account

A fixed deposit account, on the other hand, is a savings account that can earn you a higher interest rate. The difference between this and the savings account is, that you are not allowed to withdraw your money until you’ve reached the maturity date. This is so you avoid losing the interest you intend to earn. The duration of the term is usually 1-12 months and the interest you earn also depends on the term you decide to commit. Additionally, before deciding on opening a fixed deposit account, do your due diligence and survey different banks as they offer different rates. After all, don’t you want to place your money in an account that’ll earn you the highest interest rate? In short, you can think of a fixed deposit as planting seeds to grow a harvest — you place a sum of money in your FD Account for the desired duration and upon the maturity date, you’ll receive the amount deposited plus the accrued interest for your investment. 

Bank vs. Home: Advantages vs Disadvantages

It’s normal to be sceptical when it comes to where you should place your money. We’re with you and we understand. However, it’s also important to learn how to separate myths and facts. We’re going to break down a few scenarios and explain what the advantages and disadvantages are when you store your cash in the bank vs at home. Hopefully, this gives you a newfound perspective on managing your finances.


a. Building an emergency fund

If you’re looking to build an emergency fund, a savings account is perfect for this purpose. Not only are they more accessible but they’re safer compared to storing your cash at home. Imagine if you’ve gotten into an accident and needed a sum of cash quickly, isn’t it more convenient to withdraw money at the nearest ATM? Storing your cash at home is strongly inadvisable as there’s a greater chance of losing all your hard-earned money in cases of fire, break-in, or flood. Keep in mind that it only takes one incident to lose all your money. We believe that isn’t something you want, right?


b. Earning interest

When you keep your savings with the bank, you often earn a percentage of interest. Even though it might not be a lot, there’s still an opportunity to grow your savings. Keep in mind that these interest rates usually differ so make sure to compare them between banks as they also typically offer a variety of interest rate packages! On the contrary, not only are you missing out on the interest rates the bank offers when you keep all your money at home, you might even be more tempted to spend the money instead! There’s so much more to lose when you keep your money at home compared to the many benefits you can gain by placing your money in the bank.


c. Better spending habits

We often don’t realise how much benefit there is around owning a current account. Firstly, your money is safe as you’re the only person who gets to access the account. Secondly, it comes with a debit card which not only makes all your transactions secure but it also occasionally gives you the opportunity to save. Why do we say this? Many merchants nowadays are collaborating with banks, even the ones online. They offer great discounts and promotions that you can enjoy. There are some things you can buy for less when you use your debit card compared to cold hard cash. Additionally, a current account also serves as a convenient mode of payment that is applicable to online banking, money transfers and ATM functions. It doesn’t just end there, a current account also allows us to spend within our means, as we’re allowed to set a spending limit on our debit card. Sounds like there more benefits than we think, isn’t it?

It’s safe to say that banks are in your best interest when it comes to better money management. Ultimately, no matter what, the choice is still yours. The more important question here is, are you sure you want to forgo all the benefits a bank can offer?

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