Small Scale Banking

I don't know how many people are like me out there, but I do maintain a modest savings account at a local bank. I decided to look at the numbers today and figured this out:

$ .02 Cost of Envelope
$ .44 Cost of Stamp
$ .46 Total Cost to make deposit

$ .27 Interest earned after one year on $100.00 deposit
$ .19 Effective money lost if $100.00 kept in bank for only one year
20.44 Number of months $100.00 stays in bank before interest breaks even with deposit costs


Although my bank is local, the distance involved makes walking impractical. I can certainly drive a car to get there, but find that simply mailing my deposit in, to be more time and cost effective.

Running the numbers, I found that with a deposit of $100.00, I need to keep that money in the bank over 20 months just to earn enough interest to cover the expense of getting the funds to the bank.

Let's say I wanted to stow away $100.00 for a year. If I drive down to the bank to withdraw the funds, I'd have to keep that money in there even longer just to reach a break even point. I'm estimating a bit over 3 years. If I chose to withdraw the funds after a year, I'm estimating interest less expenses would leave me with $99.35 out of my original $100.00

Where really is my incentive to save?

Just thinking.