The myth
There are a few advantages to keeping cash at home, foremost of which is accessibility. Depositors will be able to get money whenever they need it for whatever reason.
On the flip side, doing this does require a lot of work to keep your cash safe, since you’ll need to consider physical security, the lack of growth potential and perhaps, demonetization.
That’s why many people believe that you should keep your cash in a bank instead of keeping it at home.
The reality
While accessibility and liquidity will always be the strengths of having cash at home, the rise of digital banking has made these less of a necessity. That’s because, with the current banking apps, you can transfer money instantly, and transact conveniently.
Another plus for keeping your money in a bank is that doing so lets it grow even just a bit. Every little amount counts, and the increments can add up over time to a good sum. In comparison, your money would experience zero growth if it was just at home.
Bank deposits are also automatically insured by the Philippine Deposit Insurance Corporation or PDIC for up to P500,000 per depositor, per bank.
If your cash was in your house, you’d be responsible for keeping it safe. Also, you’d have to consider physical protection for your bills and coins, since you’d be exposing your money to theft and damage from fire, flood, typhoon and even from pests like rats, insects, and other vermin.
While the Bangko Sentral ng Pilipinas (BSP) does replace damaged money, you’d be better off without having to go through the hassle of filing an application for the exchange.
This also helps you avoid losing your money altogether because of demonetization.
The verdict: True.
While keeping your cash at home makes it easy to reach, you can get nearly the same experience through modern banking apps. In fact, you may have a wider range of uses for it, since you won’t need to go elsewhere to send money.
Plus, deposited money is insured and you won’t have to worry about keeping it physically safe.
A good compromise is to have a certain amount at home for your immediate needs, while keeping the remainder in a bank so it can grow a bit. Of course, you’d have the chance for significantly faster growth if you invested money that you have no other important plans for.
