Six Factors That Affect Your Savings
Savings is an indispensable part of everyone’s life. People are known to save funds for various reasons. It may be to realize a distant dream or a financial goal, or to manage the uncalled spending on a rainy day.
There are several avenues to save money. Financial markets offer an assorted range of investment products that multiply your savings. Moreover, they offer significant return rate on the invested amount as well as flexibility of withdrawal. Still, no matter where you invest, the returns earned will always get affected. Here are the top six reasons that affect your savings.
1> Availability of Schemes
Most of the times, investors are not aware of different investment plans. That’s because they seldom try to take additional risk in order to gain better returns. Moreover, certain schemes are not available in particular areas. Thus, returns on savings get affected.
2> Financial Knowledge
Advertisement plays a crucial role in improving the financial knowledge of a person. If advertisements are not viewed, then you will not be aware of different products, and your decisions to choose better instruments will get affected.
3> Rate of Inflation
Rate of inflation plays a major role on the amount of returns earned over the investments. You should always know the inflation rate while selecting the investment product. Otherwise, the value of investments will dwindle.
4> Precautionary Factors
Many people do not get better returns because they are reluctant to try different avenues of investment. Basic rule of investment says that there are no returns without risks. So, take risk to earn better returns.
5> Interest rates
Banks accounts have different return rates. Savings account interest rates vary as per the prevalent economic conditions. You need to assess the rates before investing.
6> Tastes and preferences
Several people are comfortable with selection of fewer financial instruments, and often avoid expansion of investment knowledge. Thus, they miss out on opportunities to multiply their savings.