Is it better to save money in the bank or buy insurance?

The nature of insurance and bank savings

Saving money in a bank is a form of profitable investment. Meanwhile, buying insurance is a form of risk prevention. Both forms are essentially asking the bank or insurance company to "keep" money for the customer and receive interest. At a certain point, the customer will be able to withdraw the money.

With bank savings, depositors can easily withdraw money at any time. If the withdrawal is not on time, customers will not receive the original interest rate.

With insurance, withdrawal rules are more complicated. The buyer may not be able to withdraw money for the first 2 or 3 years (depending on the insurance company's regulations). After that, the buyer will only receive a refund after deducting related expenses.

Similarities and differences

Buying insurance and depositing savings in banks are both legal activities under the direct supervision of the Ministry of Finance and the Government. Both have many similarities but also many differences.

Saving money in banks and buying insurance both have their own advantages and disadvantages. (Illustration photo)

Regarding safety : Life insurance and savings deposits both provide financial security to participants. Life insurance ensures that the beneficiary will receive the committed amount in case of an accident. Saving deposits provide a safe and stable form of investment.

Form of profit : Savings are based on real interest rates. If you deposit savings for a term but close it early, you will not receive interest. Meanwhile, insurance is still based on interest rates, but the insured is always paid the exact amount of loss caused. The remaining amount is still calculated with interest.

Regarding the term: Insurance participants can choose a term of 5 years, 10 years, 20 years or lifetime. Savings deposits have terms of weekly, monthly or yearly.

Should I buy insurance or save money in the bank?

Buying life insurance or saving in a bank depends on each customer's personal financial goals, protection and savings needs. Therefore, it is difficult to determine whether buying insurance or saving is better. Each form has its own advantages and disadvantages, customers need to determine their needs to make appropriate decisions.

If you need to save money, invest profitably and have a reserve fund, choose long-term savings. Because, savings only do the right function of keeping money and generating immediate profit for customers.

If you want to prevent risks and uncertainties in the future, you can use insurance. Life insurance does not necessarily bring high returns but focuses on protecting the family's finances.

In addition, customers should also consider financial issues. If the source of income is unstable, saving money in the bank is more suitable than buying insurance. If the income is high and stable, buying insurance will help the family feel secure against risks.

Lagerstroemia (synthesis)

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