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Emergency fund: That's why you shouldn't save too much
Do you have too much money in the bank? Why this can be problematic.
Of course, you can also save too much. You can find out here the amount at which your emergency fund becomes too high.
In addition to the emergency fund in the account, which should be around three to six months' salary, it is of course also important to have a small cash reserve at home. There are always situations in which you need some money quickly or cannot pay by card.
But even if the emergency fund is important: too much savings is not good either, because it can lead to problems.
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Emergency fund: That's why saving too much is bad
We often hear about cases in which people have fallen victim to burglars who have stolen all the cash they had at home. In addition to protective measures against burglars, it makes sense not to have too much cash or expensive valuables at home in the first place.
But it's not just too much cash that poses dangers; too much savings in the account can also lead to problems.
In general, there is so-called statutory deposit protection for savings in the account (source:Consumer advice center). SeaFederal Ministry of FinanceUp to 100,000 euros are protected per depositor. In paragraph8 paragraph 2 of the Deposit Insurance ActConditions are listed, which can increase the security to up to 500,000 euros.
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If a savings bank, private bank or cooperative bank goes bankrupt, the state steps in. LoudConsumer advice center“Balances on current accounts and savings books, daily money, fixed-term deposits and claims that the institute has securitized by means of a document - such as savings certificates” are secured by deposit insurance. Stocks or bonds are excluded here. So do ETFs.
Reserves too high? Certain banks have institutional protection
Saving “too much” also comes with a certain risk. However, cooperative banks and savings banks also have institutional protection. So you take care of averting insolvencies of affiliated credit institutions.
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If your bank does not have any private insurance and the statutory deposit insurance is the only protection, it makes sense to invest assets over 100,000 euros in different banks.
Alternatively, you can of course also invest money in assets. Real estate and gold are still particularly popular. Of course, this is not the perfect solution and also involves certain risks. Whether you save, invest or invest the money is a decision on a case-by-case basis and should always be carefully considered.
Savings plan, retirement provision, stock investments – have the courage and actively deal with your finances. Read up and get advice. This is how you get the most out of what you have. Your financial freedom is in your hands.
