Savings rate


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Savings rate

Personal savings as a percentage of disposable personal income.

Savings Rate

The amount a person or organization places in a savings account or similar vehicle as a percentage of total disposable income. Savings are important for long term financial stability as it gives a person or organization a cushion for bad times. The savings rate may be calculated at microeconomic level for personal finances or may be aggregated at the national level to gauge financial health. A low or negative savings rate usually indicates excessive borrowing, spending, or both. On the other hand, a high savings rate may result in slower economic growth as persons and companies are saving instead of purchasing goods and services. See also: Rainy day fund.
References in periodicals archive ?
While retirement advisers agree that auto enrollment has made a huge difference in the overall savings of employees, they criticize the savings rate of 3% of salary traditionally used as the default when automatically enrolling employees.
savings rate is negative, meaning that Americans spend more than they earn.
Commerce Department calculates the savings rate as the ratio of personal savings to after-tax disposable income.
Its personal savings rate is 40 percent, compared to an average of 6.
99 of every $10 they earn, which has plunged the nation's savings rate to one of its lowest levels since the Depression.
America's personal savings rate plummets to record lows," scream the headlines.
The theoretical effects of a change in risk on the savings rate are also ambiguous and depend critically on assumptions regarding preferences.
It is possible, however, that this short-term drop in consumption is just that - a short-term drop - and well worth the long-term benefit of an increased national savings rate leading to higher levels of consumption.
A VAT would improve our savings rate and would encourage capital formation.
Thus, the average 14% monthly savings rate reported by the executives polled may prove to be insufficient.

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