Debt vs Savings – Which is better?

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Here’s a simple question for those who are looking to take investments for granted: debt vs savings – which one do you prefer? At face value, that may seem like an irksome question to ask but those who tend to dismiss investments nonchalantly like those presented by fixed term savings rates essentially raises the importance of this question.

Consider; isn’t it a very common scenario where people put importance on where and how to save their money and similar assets? Without going into the due diligence of comparing one investment opportunity from another, there are many who only begin to think about their monetary situation in life when the circumstances call for major spending. As a result, the earning potential of the assets get neglected, if not altogether forgotten. In some other cases, plenty of people put their money in a bank account which also doubles as their source for everyday spending. In these situations, it does not take long to see that virtually none of the savings gets retained beyond a month or two. Essentially, there are no savings in the account; only money that could be spent for daily needs.

Banking solutions like fixed term savings accounts seek to remedy this problem by offering a setup where account owners allow their money to grow without posing the temptation to be withdrawn unless otherwise necessary. To simplify; fixed term savings accounts are locked up in a fixed term so withdrawal like those via ATM cards is not possible. In the same way, the “locked” up attribute of the savings accounts allows it to earn significantly more than a standard savings account would. There are fixed term accounts that earn as much as 5% over the course of a 5-year period while finding savings accounts with more than 0.5% annual interest is already a feat in itself.

Fixed term savings accounts preach fiscal responsibility. Because owners know that this is money they cannot touch in the interim, they are not made to believe that they have more than they can spend. As a result, fiscal responsibility allows a steady stream of profit from interest while helping investors curb the impulse to spend. Without that impulse, the likelihood for debt is greatly reduced.

So, which one is better: debt or savings? If you are like any other person, you would take the necessary precautions to position your assets such that it has the potential to earn. Try out fixed term savings accounts to see how fixed term savings rates can help you realize your investment goals.

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