The Price of Money - Joishtho 1432

 

Ketan Sheikh's Finance and Banking Column

The Price of Money

Oceans in a Drop – 

The Power of Micro-Savings

In the previous Boishakh issue, I discussed financial literacy and the importance of having a bank account. This time, I’ll be writing about how financial inclusion through banks can be a powerful tool for micro-saving, and how we can turn this practice into a long-term, sustainable habit that truly benefits us.

The Cash Habit—A Double-Edged Sword

Just a decade ago, cash dominated our daily transactions. Digital payments, cards, or checks existed but were far from popular, and most vendors didn’t have the infrastructure to support them. Similarly, when it came to saving, we’d often stash cash in some secret spot at home—a tin box, a bag of rice, or under the mattress.

Then came the pandemic, and like many other things, this habit was forcibly challenged.

Since 2020, we’ve all adapted to cashless and digital transactions out of necessity. We quickly realized that if we needed to transact from home, a stash of cash hidden in a drawer might not be very helpful. As crime rates rose in many communities, we also became aware of how risky it is to carry large amounts of cash—muggings, thefts, and robberies may be unfortunate, but they’re no longer rare. Even if these crimes could be eliminated, the risk of simply losing your money remains.

The same logic applies to “home banking”—storing emergency savings in earthen pots, cookie tins, sacks of rice, or inside sofa cushions. Over time, many of us have started turning to digital methods of saving and spending, realizing they’re safer and more efficient. This shift in awareness and habit has been largely positive. Yet, despite this, many still keep large amounts of cash at home and remain more comfortable dealing in cash than through formal financial systems.

In today’s article, I’ll explore three key questions:

1. Why are we still so reluctant to move away from cash savings?

2. How can we include more people in the habit of digital or bank-based micro-saving?

3. What are the concrete benefits of financial inclusion in micro-saving?

Why Do We Still Keep Cash at Home?

Even today, to buy fruits, vegetables, or chicken from a street vendor, you often need cash. Many pay household staff in cash, give tips in cash, or pay rickshaw fares in cash. Even Uber drivers sometimes prefer cash. I know people who still pay house rent or service charges in cash and receive handwritten receipts in return. Ignoring the legal and secure nature of digital receipts, we fall back into risky, undocumented transactions simply because they’re convenient or familiar. This opens the door to tax evasion, the use of counterfeit currency, and fraud.

Because of this continued demand for cash-based transactions, people feel the need to keep cash at home. Whether it’s tucked away in a biscuit tin, under a mattress, or labeled in an envelope, people continue to save cash at home. They may or may not fully understand how risky or ineffective this habit can be, but they often believe, "I’m careful; nothing will happen to my money... and I am saving, so eventually it’ll add up."

I believe this stubborn habit stems from three key misconceptions.

The first is a fear of change—often inherited from older generations who resist new systems.

The second is a lack of trust in the banking system and an unwillingness to keep track of small amounts, wrongly assuming that small, uncounted savings will one day add up magically.

The third is simply ignorance or disinterest in the benefits of saving through banks or digital platforms.

Escaping these traps is neither impossible nor easy. If it were impossible, our economy would have collapsed during COVID. If it were easy, I wouldn’t need to write this article.

Building the Habit of Micro-Saving Through Banks

Like any behavioral change, the first step is personal adoption—only then can we encourage others. As I wrote in the Boishakh issue, signing up for mobile banking apps or other formal digital platforms simplifies micro-saving. With just a smartphone or a computer, anyone can create a micro-saving account alongside their primary banking or digital account.

Often, the people who take care of our homes set aside small savings daily or weekly. The same logic can apply digitally—once daily expenses are covered, any leftover amount can be transferred into a separate savings account.

Let’s say I end my day with Taka 10,107 in my account. I transfer Taka 107 into a micro-savings account, and begin the next day with Taka 10,000. If I continue doing this every day, by the end of the month I will have a clear picture of how much I’ve saved. Someone else in my household might still be saving small amounts in cash. If I help them open a bank account, they too can learn this method and transition to digital savings. I can even suggest they deposit their carefully collected coins and bills into that account weekly or monthly.

It’s also our responsibility to encourage this habit in children and teenagers. Financial literacy must begin early—not just by opening bank accounts for them, but by actively encouraging them to save through those accounts.

Moreover, household expenses like utility bills, rent, or domestic wages should be paid digitally whenever possible. This reduces risk and normalizes digital transactions, which will, in turn, normalize micro-saving in banks.

The Benefits of Micro-Saving Through Banks and Digital Platforms

We all know that small drops make an ocean. That’s the fundamental principle of micro-saving. When practiced from a young age, it teaches us the value of money. But saving through banks and digital platforms comes with even greater advantages—many of which people still don’t fully understand.

Money saved through formal channels is protected under central bank regulations. This means even if the bank or digital platform collapses, your funds are insured by the central bank.

Being a responsible citizen also means participating in the economy. Money saved in banks is often subject to income tax—but paying taxes makes you a proud and lawful citizen. Moreover, the money banks invest using your deposits contributes to national development, making you a conscious contributor to the economy. In some cases, your savings can make you eligible for tax incentives. These details can be discussed with your bank’s representatives.

Tracking your micro-savings digitally is also easier. Whether you’re planning a wedding, starting a business, buying a house, funding education, or paying for medical treatment—having a clear picture of your savings allows you to set realistic financial goals. Many banks offer interest or profit-sharing (in the case of Islamic banks) on savings accounts. Over time, your small, untouched savings can grow—and the idea of building an ocean from drops won’t feel so distant. It will feel like, “Let me add a few more drops today—so the ocean becomes even deeper tomorrow.”

Sending everyone warm wishes for Joishtho.

May we all build our oceans—one safe drop at a time.

© Sheikh Selim

Published in shobdomukur.com