Inflation is high, but that doesn’t mean it is a good idea to hoard your cash at home. Continue reading to learn why you shouldn’t keep money at your house, and where you should store it instead.
The money can be lost or stolen. Hiding cash under the mattress, behind a picture frame or anywhere in your house always carries the risk of it being misplaced, damaged or stolen. As careful as you may be, circumstances beyond your control may cause you to lose that money. For example, a worker in your home may find the cash and steal it or household pests might chew on the bills and render them unusable. Unfortunately, there is no way to trace or reclaim lost or stolen cash.
The money isn’t growing. When cash doesn’t grow, it loses some of its value. This is especially true during times of rapid inflation. The current inflation rate is hovering at approximately 8.5%. This means if you keep $1,000 at home for the next year and inflation remains at this rate throughout that time, your cash would be worth only $985 in one year’s time. Of course, if inflation rates increase, the loss would increase as well.
Where is the best place to keep cash?
In times of high inflation, and anytime at all, it is best to keep the money you don’t need for day-to-day expenses in a place where it can grow. When inflation is lower, your funds can grow generously, especially if you keep the money in a savings account for an extended period of time. Here are some places you may want to keep your cash at this time:
Savings account. A savings account offers a safe and secure place to keep extra funds. When you open a savings account at SeaComm, there is no risk of your money being lost or stolen, as SeaComm is federally insured up to $250,000 by the National Credit Union Administration.
Real estate. The real estate market has experienced significant growth since the coronavirus pandemic and can be a great hedge against inflation for the savvy investor. Before going this route, though, make sure you have enough cash on hand to manage your property and cover any relevant expenses, such as property taxes, repairs and more.
Share certificates. A share certificate is a savings account that is insured and has a fixed dividend rate and a fixed date of maturity. The dividend rates of these accounts tend to be higher than those on savings accounts, and there is no monthly fee to keep the certificate open. The fixed dividend rate will remain unaffected by the national interest rate, which can fluctuate tremendously during times of high inflation. Click here to learn more about share certificates at SeaComm!