Q: I’m seeing posts on social media about keeping cash at home during rapid inflation. Is this a good practice?
A: Keeping large amounts of cash in envelopes, kitchen drawers or stuffed under the mattress is not recommended during times of high inflation – or any time.
Why is it a bad idea to keep cash at home?
While it’s perfectly OK to keep some cash at home, storing a large amount of funds in your house brings two big disadvantages:
- The money can be lost or stolen. Hiding cash under the mattress, behind a picture frame or anywhere in your house always carries the risk of being misplaced, damaged or stolen. Unfortunately, there is no way to trace or reclaim lost or stolen cash.
- The money isn’t growing. When cash doesn’t grow, it loses some of its value. This is especially true during times of high inflation. Given an inflation rate of 8.5%, if you kept $1,000 at home for a year (and inflation remained at 8.5% during that time), your cash would be worth only $985. Of course, if inflation rates increase, the loss would increase as well.
Where is the best place to keep cash?
Here are some places you may want to keep your cash at this time:
- Savings Account – A savings account is a secure place to keep extra funds. When you open a savings account at Freedom FCU, there’s no risk of your money being lost or stolen.
- Precious Metals – Precious metals, like gold, silver, and platinum, have proven to hold their value even in times of inflation and a volatile stock market.
- Share Certificates – A share certificate is a savings account that’s federally insured, has a fixed dividend rate and a fixed date of maturity. The fixed dividend rate will remain unaffected by the fluctuating national interest rate. Check out Freedom’s current CD options on our website: https://www.freedomfcu.org/personal/certificates/
Inflation is high, but that doesn’t mean it’s a good idea to hoard your cash at home. Follow the tips outlined above to find the perfect place to park your cash.
Questions? Want more information on Freedom? Contact your personal Freedom Federal Credit Union representative, Patrice Ricciardi at [email protected] or call 410-612-2135!
About Freedom Federal Credit Union
Freedom Federal Credit Union is proud to be your financial partner. Freedom serves and is open to anyone who lives, works, worships, attends school, volunteers, or has family in Harford or Baltimore County, MD. As a credit union, we are committed to putting you first, not shareholders, and helping you achieve your financial goals.
Learn more at freedomfcu.org or call 410-612-2135 to see how we can help.
