Editor’s note: Recently, the news about monies being kept in houses and abandoned shops by former top government officials became viral. As against the usual practice that monies are kept in the banks, it is believed that President Muhammadu Buhari’s anti-corruption war is forcing the nation’s looters to hide their loot inside roofs, toilet, burial grounds among others.
In this article, the NAIJ.com partner blogger, Mo Davis, analyses how monies are being saved by Nigerians and why about 80% of Nigerians does not have bank accounts with financial institutions which make them financially excluded and lack access to finance, according to reports.
Mo Davis could be contacted via: info@tightbudgetlive.com
More details in NAIJ.com’s step-by-step guide for guest bloggers.
We all have our preferences for keeping money safe and in secret places to from uninvited eyes. No doubt, your mind is ‘recalculating’ on those out of sight spaces under the bed or inside pillows, which will forever remain people’s favourite spots to hide money.
Perhaps, we fancy burglars from the spirit world, wouldn’t dare shift our sleep assured bodies weights to steal beneath us, hmm?
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Burglars who are brilliant in thievery will first overturn bedding, rip open mattress and pillows! Let’s add more … they’ll rummage through garri sack, laundry bags, break jars and boxes, unbury soak away pits and cause more damages in search of money.
Check out why you must know where your cash is safest
Anyways, burglars are not so given to such hard work of ‘upturning, ripping and digging’ things, when hot slaps dealt on a victim’s face is sure to start loud confessions.
If you get the drift, you may change locations from those places exposed here. Ingenuity is what we need to hideaway cash. Don’t worry; we are all wired to be fretful and protective of our money!
Of course, our banks should remain safest of all places and where we go to save money. Banks are into money business and NDIC insurance covers “naira- for- naira” in every eligible depositors account”, ok?
I’d better capture that statement fully as quoted in the public domain. “Deposit insurance covers the balance of each eligible account, Naira-for-Naira, up to the insurance limit, including principal and any accrued interest up to the date of the insured institution’s closure.”
This and other assurances from NDIC are strong enough to stop bank run, restore depositors’ confidence to stop withdrawing their cash from counters or quietly via electronic transfers.
Without undervaluing the absolute truth in above weighty statement which is never my intention in this post, – statistical figures on ‘us’, – unbanked and low banked people are damning verdicts. We have an uptick of customers abandoning their accounts in the banks. More accounts in inactive status are going into dormancy.
A recent survey reveals that of every 10 adult Nigerians, only 3 have bank accounts. “That about 80% of Nigerians does not have bank accounts with financial institutions which make them financially excluded and lack access to finance”.
Where are those other safer havens? Is anywhere we consider safe, completely safe these days to keep our cash?
Banks are canvassing for new savers and reactivation of accounts among the 216 million GSM subscribers. Unfortunately, whatever giant strides they take, we have statistics that attest to impoverishment of savers.
As a people, are we balancing our terror for the plundering thieves and distrust of banks’ services do we say, on same scale?
This rope that pulls depositors and their monies out of banks, what will make us cut it loose?
The more people get disenfranchised, excluded from banks’ services and loans, the more they alternative with non-bank financial services. Sure, they are more likely to fall victim of money changers, advance fraudsters to name a few. Recession will go if we don’t allow depression set in.
Let’s go back to the mattress, adopted here as a favourite for keeping physical cash safe. The mattress requires no harsh terms and conditions to be raised up. No account opening forms that take forever to be regularized and approved.
True again, the attraction of interest rate payable on savings account balance, is submerged in abysmal zeros before decimal point. After 3rd or 4th withdrawal from account, customer is not entitled to any interest again. All other considerations, viewed from this point to the left, make keeping money by many in the banks dull and uninspiring.
Shall we shift a bit, away from the mattress, huh? Self-awareness relies on ability to press ‘p’ in ‘pause’ for a coherent problem – solving process to start:
What is the amount of cash? Of course, the amount of cash you park into safety is personal to you and depends on your risk appetite. How liquid you want it depends on your personal commitments also. Target savings can be informal as well as formal. Perhaps, you are stashing now, but also plan to deposit in your bank account later?
How long are you holding on to the cash? Learning not to put all your eggs in one basket is a saying that everyone should abide with. Entire life savings can be lost in one day, if not spread around.
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It is essential to carry physical cash with virtual purse, majorly in form of debit cards. In case of emergencies, that free cash will come handy. Sure, termites may not destroy entire bundle of notes, if your choice is to bury cash.
To the wise, safety cannot be underestimated and depositing your hefty cash in bank just to “prevent theft,” very sensible.
People will still trust the local money lender, sleep on money, trust their local contribution Esusu leader, or any other traditional money keeping arrangements, – if a bank is situated in front of their courtyards!
Can it generate income on its own if invested? If your money is not working for you, its flight on swift wings will come unannounced. If there is no risk, there can be no return. Learn to plough back your money through investments. Stock market is still viable. Invest in real estate and mutual funds. For the unbanked, the amounts of cash they keep are quickly turned over to re-stock.
What interest can you earn on cash from bank?
As a customer or an ‘aspiring’ bank customer, with plenty cash at hand, you need to be more inquisitive and need to shop around to get the one that really wants your money and offer you not only good services but also give good financial assistance.
Savings interest rates will never be in a hurry to shoot up. Actually, your current accounts are meant for transaction purposes. Instead, we are mishandling savings accounts and that is why the 3-4 times withdrawal clause negates any interest payable on deposits.
Most accounts that pay you high interests have a deposit cap, laced with other trappings that will eat more into your money at the end of the day.
Banks’ market facing staff will rather ‘sell’ savings, current, other hybrids accounts than government bonds because ‘they don’t add to their portfolios’. By the way, government bonds and certificates of deposits come with lower rates in exchange for the safety.
The views expressed in this article are the author’s own and do not necessarily represent the editorial policy of NAIJ.com.
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