Why keeping money in the bank isn't smart

Why keeping money in the bank isn't smart

In today's blog, I wanted to cover a topic that many people especially the younger generation don't understand a whole lot. That topic of discussion for today is why it is not smart to keep money in the bank right now. Now there are many reasons for this so make sure you continue to read so you fully understand why it's not smart. Now before we get into the article I just want to state that I'm not saying don't use banks but why you shouldn't keep the majority of your money in them. So with all that being said let us dive into today's article.         

Inflation

Our first sub-topic of discussion is the current inflation rate. The current inflation rate for the U.S dollar right now is at 7%. The inflation rate is expected to continue going up due to federal government spending and stimulus. Leaving your money to just sit in your account lets it easily lose its value without even having to touch your money. This is why it's important to invest in some sort of asset that can generate you returns above the inflation rate.  

Interest rates

Another reason to not leave your money in your bank account is the interest rates. The days of earning a decent interest rate from the banks are now long gone due to inflation. The highest interest rate you can earn from a bank nowadays is on average 0.5%. This means you get less than one percent of your money back in interest for the year when you leave it in a high-interest savings account. This is why it's best to just re-invest your money as even the highest of interest rates can't even cover the current inflation rate.  

Fees

Another reason you shouldn't keep your money in the bank is because of the fees. Some banks will have hidden fees when you use their services. Such as charging you a fee for withdrawing money from your savings account. They also could charge you a fee for having insufficient funds in your account. Then finally a fee every bank has is overdraft fees and these fees are the worst when it comes to fees from banks. Overdraft fees are one of the main tools banks use to make money from their customers. This is why putting money into banks isn't always the smartest move.   
 

My Final Words     

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