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> Every single holder of USD lost around 1-2% a year to inflation, which is essentially a backdoor tax. That's only true of cash, and money in checkings accoun
by merloen 13y ago
> Every single holder of USD lost around 1-2% a year to inflation, which is essentially a backdoor tax.
That's only true of cash, and money in checkings accounts. Money deposited in savings accounts yields interest, which (on average) more than compensates for inflation.
- mcdougle 13y agoWhat banks have savings accounts that yield that much interest? The average yield on a savings account that I've seen is 0.01%. I've seen some "high yield" accounts that can get you 0.03%. If you're talking about money market accounts (where I believe you need to park a substantial amount and can't touch the money in the account for something like 10 years, but correct me if I'm wrong), you can get up to 3% yield (just beating the stated inflation of 2%). Am I missing something?
- tveita 13y agohttp://www.money-rates.com/research-center/best-savings-accounts/2014.htm http://www.money-rates.com/research-center/best-savings-acco... Interest rates are very low right now, but you appear to be off by a order of magnitude.
- mcdougle 13y agoYou're right. I was just pulling numbers from memory. Still, even those examples are an order of magnitude off from keeping up with 1% to 2% inflation.
- merloen 13y agoYeah - "on average". The last couple of years have been an exceptional situation, since the federal funds rate is almost 0%.