Paper Topic:

Finance

Measures to increase personal savings

The following measures could be adopted to encourage savings in the United States

Increase tax incentives on personal savings

Increasing the tax incentives on personal savings could encourage people to save a larger portion of their earning rather than just spending that amount

Increase the bank interest rates

When people get more returns by depositing their money in the bank (as in when the bank provides higher interest rates ) people prefer to keep the money in the bank to spend on a later date as

they could have more money to spend on a later date than they would be having on the current date

Why is it important to increase personal savings rate

At the micro level , increasing the personal savings could lead to increasing the wealth of an individual . Savings could act as an emergency reserve which could be used on any future date

At the macro level , when the personal savings rate increases , there would be more and more savings in an economy . Higher savings lead to more investments and these investments lead to the economic development of the nation

Why are personal savings rates low in the U .S

Rise in the price of certain commodities such as housing properties has led to the reduced savings rates by the people in the United States When people get a higher pay , they are likely to spend more and save less as they would expect their income to go up in the future...

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