Inflation is the silent killer of money! People often have a false sense of security when it comes to their savings. They think that if they diligently put away a few dollars here and there into a savings account then they will be just fine later in life. The truth is, savings accounts offer very little interest and earnings on the money deposited. Often times the rates are below 1%, and even those can be promotional and temporary at times. Then you have the ability to put the money into CD’s, but the one’s that earn a decent rate of return require that you lock up your money for years to come. Withdrawing early usually comes with a stiff penalty that negates any interest you have earned. Rest assured there are ways to protect yourself from inflation, but some come with either increased risk, inconvenience, or both.
Opening an investment account is key to long term savings. My advice is to open an online account because they often hand out bonuses, and they have lower overhead costs which translate to lower fees for the consumer. Though opening a brick and mortar account is better than nothing. Next, I would make automatic payroll or savings account deductions so that a set amount of money is deposited into this account each month. The set it and forget savings method is a great way to invest without feeling the sting. These accounts will give you the ability to diversify within mutual funds, ETC, single stocks, or even binary options. If you aren’t familiar with these options then just do an internet search of binary options reviews for more answers. The key is to minimize your tax burden, fee structure, and to maximize your overall savings!
A less risky approach to protecting against inflation is to open an online bank account. These online banks are becoming more popular because they offer fee-free accounts, and offer higher rates of return on your money. These banks are able to do this because they have little overhead to contend with, and are able to pass the savings on to you. Their money market accounts and CD’s often blow the brick and mortar banks out of the water. Some people tend to get a little nervous socking their money away in these accounts, but they are just as safe as any other bank out there. With brokerages, banks, and mortgage companies venturing more and more into the virtual world these is just common practice today.