In Britain, in recent years, inflation has been relatively low, but this may not continue, and the effects can quickly mount up. If you put your money in a bank for a few years, it will lose much of its value unless bank interest rates are as high as inflation. At the moment, a good savings account pays about half the rate of inflation, so putting your money in the bank is not the safe option: it’s the guaranteed loss option! What can a smart investor do to stop the value of their hard-earned savings falling?Index-linked bonds are mainly issued by the Government, which promises to provide a return on the original cost greater than inflation. The problem is that you generally buy them ‘second-hand’, possibly at a much higher price than the original one.
In Britain, in recent years, inflation has been relatively low, but this may not continue, and the effects can quickly mount up. If you put your money in a bank for a few years, it will lose much of its value unless bank interest rates are as high as inflation. At the moment, a good savings account pays about half the rate of inflation, so putting your money in the bank is not the safe option: it’s the guaranteed loss option! What can a smart investor do to stop the value of their hard-earned savings falling?
Index-linked bonds are mainly issued by the Government, which promises to provide a return on the original cost greater than inflation. Continue reading “How To Ensure Your Savings Beat Inflation”