Here’s wishing you a financially savvy year ahead. But how do you go about investing the money you earn or get, wisely?

Over the last several columns, we have covered a lot of money related concepts. Let us do a quick recap of the financially savvy activities that a young person like you can do to make this new year worthwhile.

To start with, it is a good idea to earn money. You can do it in a variety of ways. You can do household chores and earn money. You could help out your neighbourhood children by tutoring them. Or you could walk your neighbour's dog or babysit her child. Over and above this, you can request your parents to put you on an allowance or pocket money, however small it may be.

Now that you have some coins jingling in your pocket, what is the next step? Are you going to spend it all on some treat or video game? Or are you going to save a portion of it? But, first things first. Start maintaining an account of your income and expenditure. Why should you do this? This is to ensure that you keep tabs on how much you are earning and also how much you are spending. It is a good idea to save at least 50 per cent of what you earn or get. While it could be rather painful emotionally to have the money and not spend it, you will soon get used to seeing your money grow.

Save it!

Do you remember what you are supposed to do next? Yes, you should go to the bank with your parents to explore the various savings schemes that they have for children. Don't settle on the first bank that you visit. Take your time, make a trip to different banks and decide on the one that offers you the best deal. This could be a higher interest on savings, or an ATM card or some form of insurance scheme thrown in as a freebie. If you are older, you may even get to transact online! A lot of banks are coming out with interesting schemes to attract children and you will be in a position to pick and choose one that offers the best bundle of products and services to suit you.

When you visit the bank, ask the bank manager about various deposit schemes available for adults and how they are different from the kids’ accounts. Did you notice that there is a type of deposit called fixed deposit that offers substantially higher interest rate than the normal savings account? Did you also notice that the fixed deposit interest rate varies with the time period of the deposit? Are you curious to know why this is so?

When you deposit your money with the bank, you are essentially lending your money to the bank. How can the bank afford to pay you interest? It is because they lend your money to businesses and other individuals. For example, the restaurant you frequent may want to borrow money from the bank. Or your neighbour may want to borrow money to purchase a house or even a car. However, you can take back your money from the savings deposit anytime you want. But the banks cannot take back their loan whenever they want. In order to entice people to keep their money with the bank for a longer and predetermined period, banks offer higher interest rates. This is the reason the fixed deposits pay almost double the interest of savings deposits.

Money Trivia : Financial Inclusion

Do you know that around 60 per cent of the rural population in India does not even have a bank account? In a number of villages in India, the villagers do not have access to a single bank!

Young World Money-Wizards Quiz #16

Can you name the youngest commercial bank in India? For all you know, you could be older than this bank!

If you know the answer, email it to The first five correct answers within seven days will each be awarded flipkart evouchers worth Rs. 250. The results and the answers will be published at

About Money-Wizards: A company in financial literacy and money education. They conduct workshops and after school classes on money education for school children. If you want Money Wizards programmes in your school or neighbourhood, write to