Cash – Myths, Reality, and Modern Alternatives

In recent years, both in Georgia and globally, there has been an active discussion about the use of cash. Due to widespread myths, a significant portion of the population still keeps their savings in cash at home. According to the National Bank of Georgia, approximately 57% of the population stores their savings in cash. However, how correct and safe is this approach?

One of the most common myths associated with keeping cash is its security. In reality, storing large amounts of money at home carries a much higher risk than keeping it in a bank account. Cash stored at home is easily vulnerable to theft, natural disasters, or other unforeseen circumstances.

Another popular belief is that cash is protected from inflation. In fact, the opposite is true: between 2021 and 2024, prices in Georgia increased by a total of 27%, meaning that the purchasing power of cash stored at home has significantly decreased. On the other hand, bank deposits or investment instruments provide at least partial protection against inflation, as the interest earned helps to offset the loss in value.

Although keeping cash is less effective in the long term, there are cases where it remains justified. For instance, having a small amount of cash available for emergency situations or urgent expenses can be the best solution. Additionally, in regions where digital payment methods are still limited, cash continues to serve a practical need.

However, today, many modern alternatives exist. First and foremost, bank deposits and savings accounts, which are quite popular in Georgia, offer stable returns to customers. Additionally, the development of investment funds and bonds provides opportunities for higher returns, allowing people to manage their savings more efficiently.

In recent years, new alternatives have been actively emerging in Georgia—cryptocurrencies. While cash used to symbolize freedom, anonymity, and full control, today, cryptocurrencies have taken on some of these functions. Despite the high risks associated with cryptocurrencies, holding a small amount of them can serve as a good way to diversify savings.

Ultimately, despite widespread myths, cash is more suitable for short-term needs and specific situations. For long-term financial stability, modern financial instruments are far more effective, allowing people to manage their savings more securely and profitably.