Still Saving in a Piggy Bank? These are the risks and drawbacks!

Bittime - Saving is a good habit that is taught from childhood, and many people still use piggy banks as a place to store money. However, did you know that saving in a piggy bank has a number of risks and drawbacks? The Bangko Sentral ng Pilipinas (BSP) even suggested that people prefer to keep their money in banks rather than in piggy banks.

In this article, we will discuss the risks and drawbacks of saving in a piggy bank, as well as why saving money in the bank can be a safer and more profitable choice.

1. No Interest or Additional Profits

One of the biggest drawbacks of saving in a piggy bank is that your money won't grow. Unlike saving in a bank, where you can earn interest, saving in a piggy bank doesn't provide any benefits other than the initial amount you save.

At banks, there are various types of savings that offer interest, so that the money you save can grow over time. In comparison, saving at the bank is much more profitable because you can get additional funds from the interest given.

2. Risk of Damaged or Lost Money

Storing money at home, especially in the form of banknotes or coins, carries a high risk of damage or loss. Several things that could happen include:

• Consumed by termites or pests: Paper money can be eaten by termites or damaged by moisture if not stored properly.
• Burnt: If a fire occurs, the money in the piggy bank cannot be saved.
• Stolen: There is no security guarantee for money stored in a piggy bank, because it could be stolen by irresponsible people.

By saving money in the bank, you don't need to worry about these risks. Banks have better security systems, including protection against loss and theft.

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3. Risk of money expiring or being withdrawn from circulation

According to the Bangko Sentral ng Pilipinas (BSP), one of the risks of saving in a piggy bank is the possibility that money saved for a long time will become invalid or undergo demonetization.

Demonetization is a process in which a currency that was previously legally used as legal tender is no longer recognized. If the money you have stored in your piggy bank has not been used for a long time and has been withdrawn from circulation, then the money cannot be used again for transactions or exchanged at the bank after the specified time limit.

Storing money in a bank ensures that your money remains safe and will not lose its value due to the demonetization policy.

4. Does not support economic turnover

Piling money in a piggy bank means that the money is not circulating in society and cannot be used for economic activities. According to the BSP, money saved in banks can be used for business financing, credit and investment which helps a country's economic growth.

When you save at the bank, your money will be used to support various economic activities, such as small business loans, infrastructure development, and various other financial programs. In other words, saving at the bank is not only beneficial for individuals but also has a positive impact on the economy as a whole.

5. Not Educating Good Financial Habits

Saving in a piggy bank can indeed help someone learn to save from childhood, but if done in the long term, this habit can hinder understanding of better financial management.

By saving at the bank, someone can learn about:

• Better financial management: Saving money in a savings account teaches the importance of financial planning.
• Financial security: Money in the bank is safer and easier to access at any time.
• Ease of digital transactions: With the development of technology, many transactions can now be done digitally via mobile banking and e-wallet.

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Conclusion

Saving in a piggy bank may still be considered a practical and simple way to save money. However, if you look at the various risks and drawbacks, saving in a bank is a much safer and more profitable option.

By saving at the bank, you can earn interest, ensure the safety of your money, avoid the risk of your money expiring, and contribute to economic growth. Apart from that, you can also build better financial habits and take advantage of various modern banking services that are increasingly sophisticated.

FAQ 

1. Is saving in a piggy bank still safe?

Saving in a piggy bank is safe in the short term, but carries risks such as theft, fire, or money damage due to termites and moisture.

2. Can money in a piggy bank expire?

Yes, if a currency is demonetized or withdrawn from circulation, money that is kept in a piggy bank for too long can lose value and can no longer be used.

3. What are the main advantages of saving in a bank compared to a piggy bank?

Saving at the bank provides better security, interest as additional profits, as well as easy access to financial transactions and investments.

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Reference

MSN, Saving money in piggy banks? BSP explains risks, disadvantages of not saving in banks, accessed March 11, 2025.

Author: MF