Saving habit is taught to us from childhood. Children save their pocket money in a piggy bank. There is a saying that money saved is money earned. Savings is income that is not spent. A person may save money by putting money aside in a bank or in a pension plan. Savings means preservation of money with a very low risk.

There is a difference between “Saving” and “Savings” The former refers to an increase in one’s assets, an increase in net worth, whereas the latter refers to one part of one’s assets, usually deposits in savings accounts, or to all of one’s assets.

Increased saving does not necessarily mean increased investment. If savings are kept in a cupboard/mattress, the money will not be in circulation thus it will not be invested. Money deposited in a bank is recycled by the banks which helps in the country’s economic growth.

The savings rate in our country was 33.3% at the end of March 2012. It is projected that India’s savings rate may rise to around 38% of GDP by the end of 12th Five Year Plan if economy grows at 8%.