Expert Perspectives on Hoarding Cash in Bank Accounts

The habit of saving is deeply ingrained in Indonesian culture, with bank accounts remaining a primary choice for the general public. Maintaining liquid funds is a crucial option for ensuring domestic stability, particularly amidst economic uncertainty. However, keeping too much money in a single place can backfire due to risks including fraud, inflation eroding value, and potential transaction errors.

egarding how much is safe to keep in a bank account, financial planners generally suggest that funds in a checking or savings account should only be sufficient to cover monthly needs or bills. “Savings accounts often lack the same protections as credit cards,” meaning funds can be harder to recover if an account is compromised, noted Jessica Goedel, a certified financial planner, as reported by CNBC Make It.

To avoid the pitfalls of hoarding cash, experts suggest utilising more productive instruments. Gregory Guenther advises keeping only enough for one to two weeks of expenses in a primary account, while allocating the remainder to higher-yield accounts. “If you have too little, you will feel anxious about every transaction; but if you have too much, you will miss out on growth in higher-yield accounts. The right balance is personal, but it should allow you to live without checking your balance before buying groceries,” Guenther stated.

It is also vital to distinguish between daily spending funds and emergency savings. Emergency funds are intended for unexpected major expenses, such as medical bills or job loss. Financial planners typically recommend setting aside an emergency fund equivalent to three to six months of expenses in a separate, easily accessible location, such as a high-interest savings account, to ensure funds are available whenever needed without unnecessary risk.