Keeping the money gathered to achieve particular personal goals “under the mattress” implies a number of risks. In addition to those associated with the risks inherent to a material asset (fire, theft, etc.), cash kept “under the mattress” is also subject to devaluation. The devaluation can be slower or faster, depending on the development of the national economy, but also of the large economies of the world. Economists determined that inflation occurs even in situations of perfect, well-balanced economic development, being called natural inflation. The National Bank of Moldova answers the question “What do we do with savings?” in a series of materials carried out in partnership with the Independent Think Tank “Expert-Grup”, IPN reports.
According to the NBM, the first solution is to place money in the form of bank deposits on which interest is paid and this offsets at least a part of the negative effects of inflationary processes. The bank interest rate, most of the time, follows the inflationary processes faithfully enough. Otherwise, if the interest rates were too low compared to inflation and the risk of erosion became too high, depositors would tend to withdraw their savings.
In addition to the fact that the deposit helps through interest to offset the losses generated by inflation, the money is kept much safer in the bank. Banks are rigorously checked by the NBM, and bank deposits are guaranteed by the state up to the amount of 100,000 lei cumulatively for all deposits held at a bank by one person. Starting with January 1, 2025, the maximum guaranteed amount will be 200,000 lei. In fact, in the last crises, the state compensated all depositors for the lost savings, even if the guarantee at that time did not cover the value of deposits. Keeping money in the form of a bank deposit eliminates the risks associated with money kept in banknotes, such as fire or theft.
State securities are another safe form of keeping savings. The SSs are issued by the Ministry of Finance to meet budgetary needs. They are issued through the NBM and can be accessed through the services provided by the commercial banks with which one signed a contract. During some periods, SSs may have a higher interest rate than bank deposits. Respectively, these investment possibilities deserve to be monitored.
If the objective of accumulating money is to have a more decent life after retirement, then, in addition to the option of gathering financial means through bank deposits and/or investing in SSs, the possibility of accessing life insurance can also be considered. In this way, we can build up an additional pension package to the state one by contributing monthly during the active period of life.
Of course, there are also options for placing money on foreign capital markets, such as buying financial instruments on the capital market in Bucharest or New York. In this case, we must have particular knowledge and have a reliable professional partner.
The cryptocurrency is another tool that is heavily promoted for investing citizens’ savings with promises of attractive profits. Before embarking on such investments, the NBM warns that it is good to understand that there is no regulatory authority for such currency, which could intervene and protect the interests of the people who make the investment. All these currency issues have no real economic coverage and are exclusively speculative. The chances of winning are similar to those offered by gambling.
If the achievement of the personal goal is not too far away and major crises are not in sight, savings in lei provide a higher interest rate and in such periods it is more profitable to opt for savings in the national currency. It is not lost even when converting from one currency to another, when we have to make the purchase for which we accumulate the money. If the keeping period is not definite or is distant, it is advisable to create a basket of currencies: freely convertible (EUR or dollars, or both) and in lei for generating higher income. If economic analyses suggest that a crisis is possible, we can revise the currency mix in favour of the safest one.
