But today, banks pay much lower interest rates on
your savings than the inflation rate.
Not exact matches
The average
savings account yields just 0.11 percent, which is far less
than the
rate of U.S.
inflation.
Surveyed women business owners indicated more concern
than their male counterparts over stock market performance (67 percent vs. 55 percent),
inflation (62 percent vs. 55 percent), low interest
rate on
savings (58 percent vs. 52 percent) and foreign competition (32 percent vs. 26 percent).
If your
savings do not grow faster
than the
rate of
inflation, then your
savings will lose value or buying power as time goes on.
If not, pull out your
savings and invest your money in any investment vehicle earning higher
than inflation rate.
A
savings account can't help you fight the «
inflation» unless the
rates are higher
than inflation.
If an
inflation rate is 4 %, then a
savings account should earn more
than that.
If the real interest
rate is less
than zero, then the
rate being charged on a loan or paid on a
savings account is not beating
inflation.
Since tuition
rates seem to increase at about twice the
inflation rate, the earning potential is probably greater
than the interest earned from bank
savings accounts and certificates of deposit (CDs).
In fact, currently, most
savings accounts don't pay more
than the
rate of
inflation.
A
savings account that pays less
than the
rate of
inflation is eroding your wealth.
The S&P BSE SENSEX provides you with the average market return, which comparatively, would seem more beneficial
than savings bank or fixed deposits returns which are in fact net negative returns, if one were to discount them by the ongoing
inflation rate.
Financial economists such as World Pensions Council (WPC) researchers have argued that durably low interest
rates in most G20 countries will have an adverse impact on the funding positions of pension funds as «without returns that outstrip
inflation, pension investors face the real value of their
savings declining rather
than ratcheting up over the next few years» [19]
Series I bonds pay a fixed interest
rate that is lower
than the
rate for EE
savings bonds, but they also pay a variable
rate that increases with
inflation (as measured by the Consumer Price Index) and is recalculated semiannually.
If you have access to your funds with 14 days of needing them, and have a credit card to buffer the immediate cash problem, then the issue of easy access is moot, while managing a higher
rate of interest in the «TFIA» (Investment Account vs
Savings Account) will be much more effective
than putting your extra money into a cash account that barely matches
inflation.
You're taking cash and converting it into real estate, which should increase in value at a much better
rate than inflation, CDs, or a
savings account.