How does inflation affect my savings?

Inflation is an increase in the general price level of goods and services, and conversely a decline in the purchasing power of a currency.

Persistent inflation can erode the value of your savings in real terms which means the purchasing power is falling. Typically, interest paid on savings is lower than the rate of inflation.

By investing the savings, it may be possible to achieve a return on the investment in excess of inflation. This would mean the real purchasing power of your savings is not falling.

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