What is the primary purpose of savings for a household?

The primary purpose of savings for a household is to earn interest over time. When households save money, they typically deposit it in savings accounts or other financial instruments that generate interest. This interest compensates savers for allowing their money to be used by financial institutions or invested in other ventures. Over time, this interest accumulation can help build a financial cushion, providing households with additional funds that can be utilized for future needs or goals, such as purchasing a home, education, or retirement.

While covering ongoing expenses, funding business expansion, and investing in share capital are important financial activities, they don't capture the foundational role of savings. Savings specifically focus on the act of setting aside money with the intent of benefiting from interest over time, thus enhancing the household's financial stability and growth.