US National Savings Day

• 10/12/2019

National Savings Day is a day honoring saving, financial planning, debt reduction, and wealth accumulation.

The main purpose is to encourage consumers to be aware of their saving and spending habits.

Saving in Personal Finance

Within personal finance, the act of saving corresponds to nominal preservation of money for future use. A deposit account paying interest is typically used to hold money for future needs, i.e. an emergency fund, to make a capital purchase or to give to someone else.

Money used to purchase shares, put in a collective investment scheme, or used to buy any asset where there is an element of capital risk is deemed an investment. This distinction is important as the investment risk can cause a capital loss when an investment is realized, unlike cash saving(s). Cash savings accounts are considered to have minimal risk. In the United States, all banks are required to have deposit insurance, typically issued by the Federal Deposit Insurance Corporation or FDIC. In extreme cases, a bank failure can cause deposits to be lost as it happened at the start of the Great Depression. However, since the FDIC was created, no deposits in the United States have been lost due to a bank failure.

In many instances the terms saving and investment are used interchangeably. For example, many deposit accounts are labeled as investment accounts by banks for marketing purposes. To help establish whether an asset is saving(s) or an investment you should ask yourself, "where is my money invested?" If the answer is cash then it is savings, if it is a type of asset which can fluctuate in nominal value then it is investment. There may be problems in saving money for the long term; in about 30 years its value will decrease to about 1/2 its original value due to inflation, assuming a 2-3% inflation rate.