Banks are no longer resident to hold your money and send you the details of the transactions. Digitization has changed the role of banks and the modern banking system is helping in managing finances and utilizing the money for fruitful purposes. The basic services of the banks for managing your money include the alerts for deficit balance, Payment bills on your behalf, receiving dividends, paying and receiving brokerage, etc. It becomes a center for all your payments and receipts and maintains the details of every transaction. This lessens a lot of work burden that you can get rid of. The most essential thing before any transaction, a bank verification letter is required. When you are assigned a bank account number, it is essential to be verified as a legit customer that is where a bank verification letter comes into the picture.
It is definitely not a good option to leave the money idle in your bank. Rather, it should be used to generate income. It could be done by buying assets. You can buy assets and other things when the balance in the bank account is in surplus. In case of a deficit, the bank provides overdraft services in return for a charge and you can get a loan too. While managing your finances, make sure to be in a stable situation. Proper analyzing of the areas where the money is kept and follow-up plans are very important for proper financial management.
Every asset comes with the return, risk, and liquidity. The money should be kept at a place where you get a satisfactory answer in regard to the three options. Return is what you are expecting from the investment. The higher the risk, the higher the return. Liquidity is mentioned in terms of easily converted into cash. Starting from low risk and limited return with high liquidity, there are options for fixed deposits. You need to keep the money for a fixed period of time with the bank and it gives you interest for the same. Another option is the Public Provident Fund. It gives a recent amount of return with almost no risk. It also gives you a tax exemption. Other than this, you can invest in gold while looking for a limited risk option. The time value of money in financial management is important because what is there with you right now is worth more than what will be in the future.
If you are ready to take limited risk, Mutual funds, Sips, and equities are a great option. It ensures high return and high liquidity but the risk element is high as compared to the above-mentioned options. If you analyses and invest, it could lessen the risk factor. Portfolio management is something that could help to get the benefit of high returns from equities.
Rather than keeping your money idle, it should be managed well to help it grow and help you in the future. Don’t jump to the high-risk options. Start slowly and gradually you will learn to manage the finances. creating a personal portfolio from starting to managing finances is very important.