Keynes defines saving as equal to investment, saying:
"Having now defined both income and consumption, the definition of saving, which is the excess of income over consumption, naturally follows ... Our definition of income also leads at once to the definition of current investment. For we must mean by this the current addition to the value of the capital equipment which has resulted from the productive activity of the period. This is, clearly, equal to what we have just defined as saving. For it is that part of the income of the period which has not passed into consumption."
To me, Keynes' assumption that all income that is not consumed is invested in augmenting capital seems problematic. It's pretty obvious that people do keep money on hand without either consuming it or investing it. Keynes himself doesn't seem to rely on this definition in the rest of The General Theory. In fact, his own concept of liquidity preference seems to contradict this definition. My understanding of liquidity preference is that it is the desire of people to hold their money in liquid form, as opposed to investing it to earn interest. Keynes himself says: "For if a man hoards his savings in cash, he earns no interest, though he saves just as much as before," acknowledging that people can and do hold parts of their income without investing or consuming it.
Am I misunderstanding Keynes? Does Keynes address this definition further in any of his works?