Maximising returns on savings in a high inflation environment: Strategies that work

Wondering why it is important to make your savings inflation-proof? Inflation erodes the purchasing power of money over time, implying that the same amount of funds will buy fewer products and services in the future. This erosion can greatly affect savings as well as your financial plans if not managed appropriately. Protecting your money from inflation is an essential way of making your money either earn an actual return or at least hold its real value over time.

Understanding the impact of inflation on savings
 

Savings bank accounts are secure financial products for storing your surplus funds. However, if the inflation rates go higher than the interest rates offered on such accounts, then you are in fact, losing purchasing power. This means that while the numerical savings value may grow, their actual value diminishes, making it essential to understand and address the impact of inflation.

Top crucial strategies to outpace inflation

Knowing the crucial savings tips for inflation can allow you to combat inflation while saving, empowering you to make better decisions that safeguard your wealth. This knowledge allows you to select the correct strategies and tools.

Invest in equities

While more volatile, equities have historically outperformed inflation over the long term, making them an essential component of an inflation-proof portfolio.

Diversify with inflation-associated bonds

One of the crucial financial planning for inflation control measures is diversification. Investing in inflation-associated bonds allows you to adjust the principal and interest payments depending on inflation, thus directly hedging against rising costs.

Consider fixed deposits with higher rates

Fixed deposits that provide competitive rates can assist in counteracting moderate inflation levels.

Maximise interest from savings bank accounts

Select savings bank accounts that provide high interest rates to make sure your money grows at a competitive rate.

The role of Savings Accounts in inflation-proofing
 

Steady growth

Some savings bank accounts offer a better rate of interest than others, contributing to steady, though modest growth.

Emergency buffer

High liquidity ensures funds are available during inflationary times without incurring penalties.

Management ease

Savings bank accounts are simple to manage, making them a prudent part of your inflation strategy.

Choosing the right Savings Account for inflation
 

Low fees and charges

Minimise costs with accounts that levy low or zero fees, ensuring more of your fund stays invested.

Competitive interest rates

Go for accounts that offer a rate of interest above the average to combat inflation effectively.

Flexibility and accessibility

Select accounts that offer easy access and high flexibility without penalties, which is essential during inflationary times when you may need funds unexpectedly.

How can an IDFC FIRST Bank Savings Account be your partner in helping safeguard your money against inflation?
 

Monthly interest constituent credits

Interest is calculated daily and credited monthly, helping your savings grow faster and combating inflation more effectively.

Zero-fee banking

The provision of zero fees on all commonly used Savings Account services such as RTGS, NEFT, IMPS, ATM transactions, and others allows you to keep more of your money.

User-friendly digital banking platforms

Easy tracking of expenditures and investment opportunities in mutual funds through user-friendly net banking and mobile banking platforms enhances financial management.

Unlimited and free ATM withdrawals

Your funds stored in your IDFC FIRST Bank Savings Account are always accessible at zero additional costs through unlimited and free ATM withdrawals.

High-interest rate

With high-interest rates, this offer significantly aids in maintaining the value of your savings against inflation. Experience the best interest rates and ensure your savings grow effectively.

Act today to secure your financial future

Inflation-proofing savings is not only about protecting your money but also about building financial stability and ensuring that your future quality of life is not jeopardised. By learning the impact of inflation on your savings and strategically choosing where to park your money, you can effectively fight the impact of inflation and meet your financial goals with confidence.