Barren money is cash that doesn’t earn interest. Examples include money in a non-interest-bearing checking account, cash reserves at home, and funds kept for spending. To change this, consider opening an interest-bearing checking account, depositing cash reserves in an interest-bearing account, and using a debit card instead of carrying cash.
Almost everyone has sterile money in their possession. In essence, barren money is any cash reserve that does not earn any type of interest income for the owner. There are several examples of money that isn’t earning interest in nearly every household. Here are some examples of barren money and what you can do to change that.
The most common type of sterile money is found in your checking account. While there are a variety of interest-bearing checking accounts offered today, many people still maintain the same checking account they established years ago. In some cases, this is done because there is no need to maintain a minimum balance. For people who have enough income to build up a small nest egg in the family checking account, it’s a good idea to shop around and find a bank that offers an interest-bearing checking account. In many cases, the minimum required daily balance may not be as high as you think. Plus, you’ll earn a small amount from your balance every month.
Another example of household money not earning interest is found with cash reserves that are kept at home. Often this is the emergency fund that the family keeps on hand, so you need to run to the bank in case of some sort of unforeseen financial crisis. In the past, when banks were closed on weekends and there was no ATM with around-the-clock coverage, this approach made a lot of sense. However, nowadays there’s no real reason to keep a large amount of cash at home. Create an interest-bearing account, deposit those cash reserves that used to reside under your mattress, and start earning some interest while you wait out the emergency.
A final example of barren money has to do with funds that are kept around for spending money in general. This type of barren money is usually found in a wallet or purse. Again, the advent of the ATM made this method somewhat redundant. Very few businesses these days do not accept debit cards for payment. This includes many fast food restaurants, most movie theaters, and nearly all retail stores. In short, the odds of needing cash to make a purchase are pretty slim. Instead of keeping the money in your wallet, put it in your interest-bearing account at the bank and then use your debit card when needed. Remember that there is almost always an ATM nearby if you need quick cash.
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