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savingsthe proportion of income of a person (personal saving), company or institution (retained profits) that is not spent on current consumption. Savings are typically placed on deposit with a BANK, BUILDING SOCIETY, etc., or used to acquire financial and physical assets such as SHARES or plant. By forgoing immediate spending on consumption, savers seek to augment their future income through dividends, interest and rent receipts and through capital appreciation.
In real terms, savings are important in that they finance physical INVESTMENT in the economy, enabling a country to increase its CAPITAL STOCK and hence its overall capacity to produce a greater volume of products. See FINANCIAL SYSTEM, NATIONAL SAVINGS CERTIFICATE.