How Can I Save Money Digitally?

Indians have been brought up from childhood with the mentality of saving money. That is why you have savings bank accounts in India, whereas the Americans call it a checking account. A checking account is also a bank account generally used for writing payment checks. Usually, these accounts do not earn any interest. On the other hand, savings bank accounts in India earn a nominal interest while allowing the facility of drawing cheques for payment.

Even today, savings accounts in India are prevalent. A significant majority of people still depend on these savings bank accounts for saving money. However, the advanced technology offered by banks allows us to view and operate these accounts online using the internet and mobile banking services. So, can we now say that we save money digitally? The answer is NO because there is a vast difference between digital savings and digitally operating savings bank accounts. You will understand the difference as we proceed further.

Now, we come to our preliminary discussion about what digital saving is.

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Table of Content

What is digital saving?

Digital savings can be of various types. Before discussing digital savings, let us clearly understand what does not constitute digital savings.

  • You receive your salary directly into your bank account through digital channels. Is this digital savings? No, it is not because your regular savings are received through digital channels.
  • Similarly, you receive money from acquaintances or business channels through digital modes. This saving also does not constitute digital savings.

You must understand this distinction because we will frequently refer to digital payments throughout this article. It is crucial because the demarcation line between digital savings and payments through digital channels is extremely thin.

Let us now discuss some examples of digital savings and understand how to save money digitally.

Credit Card Cashback Offers

Almost everyone would have used credit cards to purchase domestic requirements, electronics items, travel tickets, utility payments, refueling vehicles, etc. However, have you noticed that banks offer incentives to credit card users for using their cards? For example, refueling your car gets you a cashback of 5%. Remember, we have used the word cashback and not discount. A discount is a concession where you pay less and get more. In contrast, a cashback is an incentive that gets credited to your account after paying for the total value of the goods you purchase. This cashback is an example of digital saving.

Similarly, credit card issuing banks and companies offer rewards points every time you use the card. It gets accumulated over a period. Card users can redeem these points and get discounts on purchasing specific merchandise. It is also an example of digital savings even though the amount does not get credited to your savings bank account.

Besides, credit card users get benefits like discounts on air tickets, hotel bookings, complimentary airport lounge visits, waiver of renewal fees, etc. All these benefits are notional digital savings.

Cashback offers by Payment Apps

No one denies that the coronavirus pandemic created global havoc. However, it is said that ‘every cloud has a silver lining.’ The COVID-19 pandemic hastened digital payments in India, with almost every streetside vendor accepting digital payments. Google Pay, Phone Pe, MobiKwik, PayTM, Bhim App, BharatPe, etc., have become household names. People use these payment apps to make peer-to-peer payments, even within the household.

So, do these payments constitute digital savings? The answer is NO because they are regular payments made digitally. But, here comes the catch.

Payment apps like Google Pay (popularly known as G-Pay) offer incentives to users primarily to attract them to the platform and use it regularly. Initially, G-Pay offers immediate cashback, depending on the transactions you make. These incentives are digital savings. Then, G-Pay starts offering discount coupons that you can redeem with the specific vendor and get discounts as you start using the platform continuously. It is also a classic example of digital savings.

Besides, these payment channels are also available for your utility payments, including your electricity bills, property taxes, water bills, and even credit card bills.

G-Pay is not the only payment app that offers these incentives. Almost all the payment apps act as money-saving apps because they provide cashback and discounts to all their customers. Since the entire society uses these payment apps today, you can also refer to the savings as low-income users’ digital money savings.

However, these cashbacks are credited to your savings bank account registered with the payment app portal (usually through your mobile number). Thus, you can experience a seamless integration between your regular savings and digital savings. Moreover, as these payment apps use the UPI interface, they are safe.

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Credit Card Paying Apps

Earlier, credit cardholders used cheques for paying their credit card bills. Subsequently, they started using digital channels like online banking. Today, payment apps like G-Pay and others allow such payments. Using this channel, you can make credit card bills from multiple banks from a single location.

Besides, dedicated credit card payment apps like Cred offer the facility of paying multiple credit card bills through a common channel. The advantages of using Cred for paying credit bills are,

  1. You can make timely payments because Cred sends payment notifications regularly.
  2. The payment gets credited to your credit card account within minutes.
  3. Cred helps you monitor your credit card usage and provides facilities for viewing your credit card statements online.
  4. You can also view your unbilled usage at any time.
  5. Cred offers exciting cashback on using their channels to pay your credit card bills. Cricket lovers would have noticed that Cred provides up to 100% cashback on payments made during specific periods in the cricket matches.
  6. Cred offers bounty rewards in discount coupons that you can redeem at the respective vendor website.

All these additional benefits provided by Cred qualify as digital savings.           

Food apps

Every Indian would have heard the name Swiggy and Zomato. These apps do not need any introduction. They enable users to order their food online from participating restaurants. Though the individual pricing on the app menu could be higher than the offline restaurant menu, these apps offer exciting discounts on purchases up to specific amounts. Besides, regular users get a waiver of delivery fees. All these savings constitute digital savings.

Since all income groups use these apps, you can refer to these savings as low-income users’ digital money

Travel apps

Just as Swiggy and Zomato are popular, so are Ola and Uber. Almost every Indian would have used these apps at some point for traveling. These apps offer conveyance facilities at cheaper rates than regular taxis and auto-rickshaws. Besides, they offer discounts and other benefits that construe as digital savings.

During COVID-19 times, these apps offer COVID hospitalization cover at heavily subsidized rates. The principal insured person can take treatment at specific hospitals up to a particular amount (Rs 20,000). This insurance cover also qualifies as a notional digital saving.

Other similar apps

Like Swiggy, Ola, etc., hundreds of other apps are available in different consumer sectors. For example, you have grocery delivery apps like Grofers, Big Basket, Jio Mart, Zepto, Swiggy Instamart, etc., that offer excellent savings through subsidized pricing, cashback, and loyalty points. The pharmacy sector offers similar benefits through service apps like Tata 1mg, Pharmeasy, etc. These apps also help save money digitally. However, the cashback offered by these apps has to be redeemed on the same app. Moreover, they do not provide facilities to credit your savings account. However, they still qualify as digital savings.

Money Managing Apps

Various money-managing apps are available on Google PlayStore and App Store. These apps help you track your expenses, plan your budgets, set up auto-debits for recurring payments, etc. You can create backup files in MS Excel and view them anywhere. Some of these apps allow you to link your bank account or debit card to help make payments online. These valuable apps include Money Manager Expense & Budget, Thriv Savings Goal Tracker, Money Lover, Monefy, Wallet, etc. Any person can download these apps and use them for tracking their expenses. Tracking your expenses and paying bills on time help save valuable money. Hence, they qualify as money-saving apps.

Digital Banking Accounts - Salary saving apps

People who watch TV regularly, especially the IPL cricket matches, would have come across exciting advertisements like NiyoX, an app that earns interest on your salary. Amazon offers a similar feature in its Chime app. These apps are digital banking accounts that provide additional interest on your regular savings accounts with the banks. The only condition is that you use these apps to transact business. These apps offer unique facilities like earmarking a specific portion of your salary to meet contingent expenses. As a result, they also double up as money-managing apps. They offer rounding-off specific expenses and transferring them to a separate account to encourage the digital savings habit.

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Gold Saving apps

Gold is always a preferred investment avenue for Indians because of its sentimental value. Secondly, gold prices keep appreciating over time. Therefore, investment in gold is always beneficial. Instead of buying and storing physical gold, you can use specific gold-saving apps like Jar to build up your gold balances. These apps are beneficial because they convert your savings into gold at prevailing prices. So, when you redeem them, you get returns at the prevailing price on a particular day. With the gold value not showing any reduction signs, these apps provide the best ways to save money digitally. These apps also offer expenditure rounding-off features and transfer them to the gold account to enhance your returns

P2P lending platforms

P2P lending platforms help you earn attractive interest on your investments. Apps like Bharat Pe offer up to 12% interest per annum on your investments on the forum. As this interest amount is not reinvested, you can withdraw it at any time without paying any fees. The interest amount is credited daily to your digital account. Thus, it provides an excellent avenue to save money digitally.

Individuals and businesses can use the Bharat Pe app for making payments. In addition, Bharat Pe allows investing and borrowing facilities at 12%.

Online Chit funds

Indians are not new to chit funds because these instruments are the favorite savings option for people in the unorganized sector. Today, you have online chit funds to earn sufficiently high-interest levels on your investments. Reliable online chit funds platform like Moneyclubber.com offer interest as high as 25% on your savings. However, it depends on how the bidding activity proceeds on the platform. The interest earned on such online chit fund investments constitutes digital savings. These funds are available for all income groups. Generally, the lower-income groups access such chit funds in times of financial crisis as it provides them with finance at a low-interest rate without any documentation procedure. So, they qualify as low-income users’ digital money.

Cryptocurrency Trading Platforms

No one can ignore cryptocurrency when discussing digital money because cryptocurrency is entirely digital money. Therefore, though you invest your regular savings, any gains on the trading platform constitute digital savings.

Similarly, your profits from trading NFTs are treated as digital savings. The income earned on cryptocurrency staking also qualifies as digital savings.

However, trading on these forums requires people to be aware of the risks of cryptocurrency trading. Moreover, a lot depends on the government regulations concerning taxing crypto gains, etc. Nevertheless, cryptocurrencies are gathering momentum, and investors view these trading platforms as excellent investment avenues.

Final Thoughts

The world is changing, and so are the ways people invest money. There is a paradigm shift towards digital savings from the traditional saving platforms. More people are using digital payment apps for purchasing their daily groceries, vegetables, and fruits. The awareness levels among people are also increasing. It is crucial because digital savings can give you good dividends and be risky because of cyber threats. However, the best part is that people have embraced digital savings as the future.