What are idle money?

idle money is an economic term that refers to any money that is figuratively idle in the sense that it does nothing at all to benefit you from anyone, especially the owner. This term can be used for any type of money in the bank that does not earn any considerable amount of interest or which does not earn any interest type at all. Another way to describe this type of money is to mark it as a barren money, obvious that the money bears no fruit for the owner.

An example of idle money is more often the money that is placed on the current account. The higher the amount of money in such a number, the more tragic from an economic point of view, given that the money could be used for other purposes of profit or interest. At least, the placement of such money in a savings account will gain some degree of interest, which is more advantageous than the state of economic revenues that is experiencing in a check -up account.

This does not mean that there is no point in having money in a check -up account. There is more money from an economic point of view,which are located on a current account, directly associated with the loss of additional incomes that could obtain from it, especially if the account owner hardly uses more than a slight fraction of this money. Illustrations of the concept of idle money can be seen in a situation where Mrs. B placed $ 35,000 (USD) on her check account. Assuming Mrs. B barely used more than $ 3,000 per month, the rest of the money would be idle on its check -up account.

If, on the other hand, if Mrs B leaves about $ 5,000 in their account and places the rest on a savings account, the money will at least earn it guaranteed interest. The exact interest rate will be determined by the effects of a combination of fiscal and monetary policies, in addition to the personal principles of the bank. By putting money into the savings account Mrs B has transformed previously idle money into some kind of active money, although the level of activity is minimal and passive. Another type of idle money is liquid cash that people can store somewhere.