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The Best Savings Account to Beat Inflation

By Contributing Author 

You have probably noticed how the prices of goods and services always rise over time. Sometimes it’s subtle and other times almost feels instantaneous. This rise in prices is a phenomenon called inflation.

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It happens in almost every economy, both developed and developing. Inflation isn’t an issue when properly controlled. Most economies will try to maintain a certain level of inflation throughout the financial year.

The problem is when it’s let loose and gets out of control as it can lead to your money losing value and becoming close to worthless. A good example recently is Venezuela and a previous example before that was Zimbabwe. The one problem with inflation is it affects the savings you make.

What is inflation?

Inflation is the general rise in prices for goods and services. At the core of it, the reason for inflation can be explained easily. The scenario in which inflation occurs is an economy grows with an increase in the total money supply.

This increase in the money supply brings about an increase in demand for goods and services. This increase in demand brings about an increase in supply that brings about an increase in price. Sellers increase their prices as more people buy goods. This is why even countries with growing economies still face inflation.

It’s also one of the reasons why inflation isn’t always viewed in a negative light. As long as it’s kept in check, inflation is a good thing. The above isn’t the only reason for inflation. There are many other reasons for prices increase other than economic growth.

For instance, an increase in wages for an automaker could cause an increase in costs which would lead to an increase in prices.

How Inflation affects your savings

Inflation has a detrimental effect on your savings as it decreases your buying power. Buying power is simply the amount of goods and services that one US dollar can buy. Inflation decreases your buying power as it leads to an increase in prices. A good example would be the price of gas.

Let’s assume you could get 2 gallons for a $1 in the 80s, but today the same $1 can only get you 1 gallon. This illustrates a decrease in buying power. Inflation can affect your savings negatively. It affects how much the same amount saved can be used in the future. It can distort your savings goals.

For instance, you have $100 stashed away in a savings account to buy a bike worth the same price. If you wait a year later with an inflation rate of 3%, that same $100 won’t be enough to get you that bike. You need to keep “how much is inflation” in mind as you put money away to save for particular goals.

Inflation can catch up and reduce the buying power of that money. It can have even more detrimental effects on certain groups of people like retirees. This is because they won’t maintain their standard of living due to a decrease in the buying power of their money/savings. It’s because of this that you need to beat inflation as you make savings.

Ways You Can Beat Inflation

The best form of investment is one in your education and training. You need to combine both education and training for the best outcome. You can use assignment service by experts to keep tabs on the education side and make the combination easier for yourself to handle. You need to get high yield savings account to beat inflation. To make you understand why you need this, we’re going to give you an example.

You save $100 in a savings account with a yearly interest rate of 1%. You’ll have $101 by the end of the year. If in that same year, the annual inflation rate got to 2%, you’ll need $102 to have the same buying power in the next year. Your $100 will have marginally lost its buying power.

Inflation can creep in and certain groups like students might not notice the rise in prices. It’s important that you research online to get the best savings account that’ll beat inflation. This might take time, but it needs to be done. To save up on time, students can turn to Australian essay writers. You need to get a savings account that provides yields that are better or higher than the yearly inflation rate.

According to many financial analysts, for the first time in a long while, the yields from savings and money markets are ahead of inflation. The Federal reserve can be credited for this as it has been hiking interest rates for the past few years. The surprising thing is most Americans are leaving money on the table according to a Bank rate survey done in 2018.

You don’t need to limit yourself to only savings accounts. If you’re wondering what to do with your money other than a savings account, there are many other options that you can use to increase your returns. You can choose to go for Certificate of Deposits, better known as CDs.

When choosing a CD, don’t get locked into the long-term ones. If the rates do increase, you’ll still be stuck on the old rates. The best option is short term CDs that give you flexibility as the rates change.

Another option would be to invest in Treasury bills. These bills are loans to the government, so they carry the full backing of the federal government. Treasury bills are a low-risk investment that offers good returns as well.


Inflation will always eat away at your purchasing power and savings. As a consumer, you need to try your best to stay ahead of it. CDs, treasury bills, and high yield saving accounts are just some low-risk options in the market.

If you’re a risk-taker, you can go for the stocks and index funds. Remember, the higher the risk, the greater the return. You’re much more likely to lose money in these markets, but you’re also likely to get a great return that’ll help preserve your buying power.

Author Bio:

Alvin Franklin is a career coach working with students from schools and colleges working to enrich student life by going beyond the traditional methods of studying. He also works as an academic writing consultant for online services. In his free time, he enjoys beach volleyball, guitar, and cooking.



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