The Impact of Inflation on Savings
When it comes to storing money, many people assume a savings account is the safest option. Savings accounts do offer important advantages: they are FDIC-insured, liquid, and preserve your nominal balance. But they do little to protect your purchasing power over time, particularly when inflation runs above the interest rate your savings earns. This article explains how inflation erodes purchasing power, what that means for savers, and how some investors approach the problem.