When we think about savings, most people think of government-issued (fiat) money in their bank account. But with the average account offering 2.65% interest per annum, is fiat money in banks the best way to save for the long-term?
As consumers, the general view is “We don’t get much interest in bank accounts, but at least my savings are going up”. But are they really? The figure might be but one important element people forget to factor in is the impact of inflation on their savings. Inflation is the rate at which prices rise year on year. The same items in your weekly shop will cost a lot more fiat money in five year’s time than they do today, but you’re still buying the same things. Over the shorter term, say months or a year, the same is happening but its less noticeable.
The important thing when it comes to your savings, is about the spending power of that money. Your traditional bank account may say you’ve got 2.65% more per annum as a figure but as inflation is 6.3% p.a. (if referring to the Consumer Price Index), 10.5% p.a. (if using the Retail Price Index). Even in a high interest account offering 7% per year, you’re still losing between 0.7% and 3.5% p.a. of your purchasing power through inflation.
But there is good news for consumers! As savings in TallyMoney Accounts are physical gold, not government-controlled currency, they are protected from inflation. In fact, Tally is a way of making your savings inflation-proof. Gold is also a proven store of value over time. 10 grams of gold 30 years ago would still buy you the equivalent basket of meals, clothing and accommodation as it does today. On the other hand, one hundred pounds sterling 30 years ago would have bought 500% more of these items in 1993 than it does today.
With TallyMoney, your savings grow maintain their purchasing power over time (as gold increases when priced in government-issued fiat money). Over the last 5 years the price of gold has increased by 70% against the Great British pound. When it comes to long-term savings, no other banking account can protect the value your savings (and what you earn for your work, labour and sacrifice) like TallyMoney can. After all, if you’re giving 100%, you should keep 100% of the value.