Understanding the Impact of Inflation on your savings
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Wealth Management
Understanding the Impact of Inflation on your savings
Wealth Management
9/11/2022 2:52 PM

Understanding the Impact of Inflation on your savings

We all feel the impact of the soaring prices of consumer goods and services daily. And with these increasing costs, more people are pulling back and avoiding making unnecessary purchases. Instead, they’re putting all their money into their savings accounts in case of an emergency. But is that a smart move? Let’s explore how inflation impacts your savings.

Whether buying groceries or a new pair of shoes, prices have gone up—and we’re all feeling the crunch in our wallets. Inflation in the US is at a 40-year high after the Covid-19 pandemic hit the global economy and the addition of global conflicts. 

Key takeaways:

  • Inflation rates can surpass interest earned on savings and/or checking accounts, resulting in the account owners losing money.
  • There are many ways for you to safeguard your savings from inflation - one option is funding the Stake & Make 9 % bot. 
  • Before investing, have an emergency fund that covers 3 to 6 months of monthly expenses.

What is inflation?

Before we get started, let’s get on the same page. So, what’s inflation? Inflation is the rise of consumer goods and services over time. For example, in 2005, the average movie ticket cost was $6.41. In 2019, it was $9.16, and now in 2022, it’s $16.19. 

Inflation isn’t always a bad thing. The government likes to have an inflation rate of around 2%, indicating economic growth. However, it reduces consumer buying power once it rises above that threshold. Want to read more about inflation and its types? 

Recommended: What is Inflation: Types & Causes Explained

How does inflation affect your savings?

During times of inflation, many of us will hold onto our money and keep it in the bank, thinking this is the safest move to make. However, during times of high inflation, your savings risk losing value. 

In other words, the money in your savings account loses buying power, and you buy less with your money.

For example, let’s say that for the next 5 years, the inflation rate is 3%. This means, what will cost you €1,000 today, will cost you €1,159.27 in 2026.

If you put €1,000 into a savings account today, paying 0.5% interest, you’ll only get back €25.25 interest for the next 5 years. 

So, you would lose €134.02. And in times like these, you want your money to work for you. So, how can you protect your money from inflation?

How to safeguard your savings?

To make the most out of your savings and give your money the potential to grow, investing your money can help you beat inflation. Why? Because investments, such as bonds, mutual funds, crypto, and shares, can increase your money over time—more than what a savings account offers.

While we feel investing is the best way to safeguard your money from inflation, make sure you have an emergency fund beforehand. You should have an emergency fund of between 3 to 6 months of monthly expenses saved before investing. That way, you won’t have to dip into your investments to cover any unexpected costs.

Investing smartly with the BOTS App: How to invest for beginners

If you’re new to investing, it can be an intimidating process. Most of us have been taught the best way to secure our money is by keeping it safe in the bank. However, you can make better use of your money through investing. But if you’re a beginner, how can you invest smartly?

Naturally, there are high-risk investment options that will give you great returns, but that’s not necessarily what you need to invest in to make money. At BOTS, we offer our users the Stake & Make 9% bot which is comparatively lower risk yet aims to provide you with a steadier income.

Instead of a high-yield savings account, our Stake & Make 9% bot stakes your funds in USDC and other leading crypto assets. 

Fund the Stake & Make 9% bot

This bot aims to provide you with a stable high fixed return of 9%, with the rewards paid out on a weekly basis. Additionally, investing with the BOTS app is hassle-free. So, you can invest and monitor your investments wherever, whenever.

For investors looking for even lower risk, there’s the 6.5% Savings bot which converts the money you deposit into stable USDT and provides you with a return rate of 6.75% per year. Since USDT is a stablecoin, the 6.5% Savings bit is low risk and may help you grow your capital.

Final thoughts

Keeping your money in your savings account isn’t going to help you safeguard from inflation. However, investing your savings could potentially help you get one step closer to beating inflation. Luckily, the BOTS app can help you start your investment journey and have your money work for you.


This blog is for educational purposes only. The information we offer does not constitute investment advice. Please always do your own research before investing. 

Any views expressed in this blog and by BOTS do not constitute a recommendation that any particular cryptocurrency (or cryptocurrency token/asset/index), portfolio of cryptocurrencies, transaction, or investment strategy is suitable for any specific person.

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