What image do the words bank robber conjure up? Perhaps the one above?
Well, maybe it’s time to think again about storing your savings in the bank. As I write this in February 2023, a cursory glance at my own bank’s guide to finding an account “that best suits your needs”, the most attractive rate I can find for an expat (we’re not allowed to invest in ISAs while not tax resident in the UK), is 2.55%, assuming I make no more than three withdrawals in a year.
Let’s say I invest £1,000 into this enticingly named “Reward Bonus Saver”.
I’m a good little saver with a distinction in the 'Marshmallow Test' thanks to my disciplined delayed gratification habits.
By then end of the year, I now have £1,0025.50p in my bank account.
But, even if we take the Office for National Statistics’ Consumer Price Index at face value, inflation rose by a whopping 9.2% in the 12 months to December 2022. In truth it probably rose a lot more than this...
If we deduct 2.55% from 9.2% we’re left with 6.65%
So that’s what you’re effectively losing by ‘saving' your money with the bank.
What image do the words bank robber conjure up now?
Perhaps the one below?
