Savings can help cover unforeseen and major expenditures, and help not to be in debt. Also, it can bring extra money and allow greater consumption in the future.
How to start saving?
Before you begin saving, consider how much funds you will allocate, according to personal possibilities, but also what saving option you will choose.
What saving option to choose?
- ”mattress” savings or safe,
- bank savings, or
- life insurance.
”Mattress” savings or in safe is an old way of saving. Depositors can dispose savings based on current needs and possibilities. But this option of saving carries certain risks, such as: theft, fire, forgery or loss of a part or even the total value of savings caused by inflation.
Saving in a bank enables the preservation of the value of invested funds in BAM and foreign currencies along with the realization of a certain yield (interest). The invested funds are secured by the bank’s financial strength, while the Deposit Insurance Agency of Bosnia and Herzegovina insures deposits of up to 50,000 KM to depositors. Depositing period (long-term over a year or short-term up to one year) determines the disposal of funds, but there is a possibility of early termination of contract and withdrawal of funds.
The savings book is a standard written document that the bank must issue to the owner of the deposit and is an instrument of disposal and identification of the user before the bank, which proves all payments and withdrawals from the savings account.
All payments and disbursements of money in the savings account must be entered in the savings book at the bank office, signed by a bank employee and certified with a seal. The user can subsequently request the bank to record the payments and withdrawals made. Any unauthorized entry into the savings book is grounds for criminal and material liability.