Is Saving Money in a Bank a wise Move?

Inflation and Policy Makers are KILLING Savings Accounts

What You NEED to KNOW about Banks & Savings

Saving money in a bank is generally considered a safe and secure way to store and grow your money, as banks are federally insured and backed by the government. However, there are certain circumstances under which saving money in a bank can cause you to lose money.

One of these circumstances is inflation. Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly. However, when the rate of inflation is higher than the interest rate on your savings account, the value of your money will decrease over time. For example, let's say that the rate of inflation is 3% per year and the interest rate on your savings account is 2% per year. This means that the purchasing power of your money is decreasing by 1% per year (3% - 2% = 1%), even though you are earning interest on your savings.

Another circumstance in which saving money in a bank can cause you to lose money is when the government engages in quantitative easing. Quantitative easing is a monetary policy that involves a central bank creating new money and using it to buy government securities or other securities from the market. The goal of quantitative easing is to stimulate the economy by increasing the money supply and lowering interest rates.

However, quantitative easing can also have the effect of decreasing the value of money, as it can lead to an increase in inflation. When there is more money in circulation, the value of each individual unit of currency decreases. This can lead to a situation in which the value of your money decreases, even though you are earning interest on your savings.

Saving money in a bank is generally a safe and secure way to store and grow your money. However, there are certain circumstances, such as inflation and quantitative easing, that can cause the value of your money to decrease over time. It is important to be aware of these risks and to consider diversifying your savings and investment portfolio in order to protect against potential losses.