Savings rates with banks are low and have been for years. In terms of value, your savings are actually decreasing due to inflation. This year’s decision by the European Central Bank to leave interest rates on hold isn’t going to help either.
With interest rates at historic lows, savings rates have struggled to keep pace with inflation. Savers would have needed a 3.9% interest rate over the last five years to beat inflation. Many of us have not been getting near this rate, however, there are options out there that can help protect and help build your wealth.
While it’s tempting to leave your money in a ‘risk-free’ savings account, the value of your capital in real terms may be falling. There are things you can do to try to beat inflation and maintain the buying power of your money.
One option you may wish to consider is investing over the medium to long term, 5 years or more investments offer potentially greater returns than fixed rate savings accounts. But, before you invest, there are a few things to consider.
- Do you have spare money that you could afford to invest?
- Could you afford to tie up your money for 5 years or more to ride out ups and downs in the market?
- What is your attitude to risk?
A professional financial advisor can help you to answer these questions and others. They will be able to tell you if investing is right for you. Your advisor should have plenty of financial planning and investment experience, they can also help you to invest in a way that suits you.
If you would like to learn more about how you can keep up with inflation and protect your savings BOOK A CALL TODAY. An advisor can explain your options to you carefully and make sure that you are comfortable with any decisions you make.