In a volatile economic landscape, the importance of prudent financial planning and savvy saving strategies becomes more critical than ever.
According to the Head of Retail Banking at First National Bank, Akweley Laryea, when inflation is high the value of money seems to shift like sand beneath our feet, with a knock-on effect on interest rates and the cost of living. “Despite this, it’s encouraging to see many individuals and families continuing to explore ways to save,” says Akweley.
She asserted that savings and investment products are some of the most popular ways to preserve and grow money for Ghanaians. However, it is crucial to make sure that your money is working for you, as inflation can impact the value of your savings. “During high inflation and market volatility, people who keep their savings will not lose value unless they decide to withdraw the cash. Interest on savings may be lower compared to the inflation rate, but the value of their savings is steady and does not lose any value.”
Akweley explains that there’s no one-size-fits-all approach when it comes to saving solutions, as it’s dependent on one’s circumstances and goals. Hence, it is important to explore several solutions to cater for each individual’s or family’s needs.
The following options are some of her recommendations:
- Savings accounts provide a flexible option to save money. Savings accounts often have lower interest rates than fixed term accounts, but they also provide you the freedom to access your money anytime you need to. This can be beneficial as it can be used as an emergency fund.
- A fixed term investment is a good choice for people searching for high guaranteed returns on their investment. If you do not require instant access to your money, fixed deposits are among the best options. Funds are fixed in an investment for a specified period of time which could be anywhere between 1-60 months, based on your preference, and upon maturity both principal plus accrued interest is paid to you. Alternatively, with First National Bank you can opt to pay out your interest on a monthly basis to your savings/current accounts whilst the principal remains fixed to provide access to funds to meet monthly needs.
- A flexible fixed investment account such as the First National Bank Flexi-Fixed Investment Account can be a great compromise between the fixed-term and savings accounts. This is for customers who would want to earn high returns of a fixed term investment but also have access to money in case of an emergency, as the account allows withdrawals up to a limit. In addition, you can to top-up your fixed investment at any time using the bank’s digital channels.
- Notice Deposit investments are for customers who want to gradually grow their investment and be rewarded with higher interest as their funds grow. The First National Bank 32-day Interest Plus account allows you to earn more interest on your account. The longer the funds stay with the bank, the higher the interest rate increases after 32-days and again hiked after 64-days of your money staying with the bank. As you add more money to your account, you are rewarded with higher interest to accelerate the growth of your funds. You just need to notify the bank when you are ready to withdraw your funds.
“You don’t need to halt or pause saving or investing because of a temporary economic difficulty. Saving during higher interest rate periods increases the income you earn over this time. The earlier you begin saving, the more you give yourself a better chance to grow your savings and be better off over the long term,” concludes Akweley.
