Financial lessons from demonetization | Fusion - WeRIndia

The announcement of central government on demonetizing the higher denomination currency notes taught many financial lessons to citizens. In addition to black money, all currency notes that were legally saved for emergency needs became invalid post demonetization. In this situation, everyone should learn some lessons which are very helpful for a better and happier future.

Experts recommend saving money as emergency fund which should serve the needs of minimum of six months. But, all this should not be in the form of higher denomination currency notes. This was revealed by the current demonetization. So, keep notes of ₹10, ₹20, ₹100, ₹500 and ₹2,000 each in your wallet. Save 100 notes worth ₹10,000 in your almirah for emergency needs.

It is not good to save all the cash in your home for years as it does not yield any return. So, invest the cash in short-term deposits.

You can deposit your cash in savings account for the needs of a couple of months since you need not pay any tax on the interest up to an amount of ₹10,000.

The remaining amount saved for four months can be invested in fixed deposits. It yields more interest than the amount deposited in savings bank account. You need not go to bank for converting your savings deposit into fixed deposit. You can do it online.

If you do not have enough time to convert your deposits into fixed deposits, open a special savings account in which all the cash after a certain amount will be converted to fixed deposits automatically. You can even withdraw the required money when you need it.

Invest some money in liquid mutual funds which yield up to 7 per cent interest per annum.

These investments are ideal for those who want to avoid risk as they are secure investments.

Rather than keeping your money in your home, which is worthless, save your money in banks, shares, mutual funds and other investing methods.

It not only helps you, but helps the society as well.

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