Economy

Current account, how to protect money from recession

It can cost you dearly to keep real estate in your checking account in the long run. Some investment tools can bring unexpected money.

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Money in the checking account, which has always been synonymous with savings, can face a somewhat uncertain future. Indeed, from 2022, the rules for keeping money in the account will become more stringent, due to the desire of banks not to keep a lot of money in stock, Both for the harmful effects of immovable amounts held for a long time. The first pressure has already arrived, with some credit institutions preparing to close their very high accounts containing almost unused amounts in investment channels. This is because money management, in the period of interest rates does not offer significant returns, and represents more cost than profit.

The goal is to encourage customers to use their money rather than keep it in stock, which creates a burden on both those managing the account and the account holders themselves. This is for a very simple reason: the checking account is presented as a useful tool for payment, while in itself it does not offer investment opportunities, as happens, for example, with postal coupons. In order to avoid stamp costsThe funds in the account must not exceed the 5 thousand euro limit. In practice, you should keep enough funds on this tool to cover expenses, without increasing the balance too much.

Money on the current account, how to avoid the wrong stock

Money left in storage without investment will end up having a recessionary detrimental effect on any economy. The problem often is that the owners of the money do not know how to use it, Making a fairly common mistake. Yes, because leaving excessive liquidity in the account will, even without large advertisements, lead to increased impoverishment. Whether for operating expenses or for inflation, which increases in the case of weak purchasing power. The beauty of it is that avoiding similar situations is easier than you think. The accumulation of capital over a variable period of time is actually possible even by allocating very low amounts, even if it is 50 euros.

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In this case, we are talking about the so-called “opportunity cost”. The tendency to save is typical for every taxpayer, gradually accumulating sums of money in order to create a pool of liquidity useful for future needs. Even in this case, there is a common error. In order to keep the relevant amounts on their own account, Accumulate for example 100 or 200 euros per month without making a profit. However, investing the same amounts in instruments capable of achieving attractive percentages, will allow to obtain very important figures in the long run. If you want to pick up the stock markets, ETFs are a guarantee, given that they’ve returned in the past decade by as much as 15%. Basically, it is always about balancing immediate needs with future ideas.

Thelma Binder

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