Blog Post
Andrés Glennen

Why Don't Your Savings Grow in a Traditional Bank Account?

In our daily lives, we rely on banks to grow our savings. However, we are often faced with a challenging reality: minimum bank interests are barely keeping pace with Inflation, the silent thief of your money. Inflation constantly decreases the purchasing power of your money How Does Inflation Impact Your Savings and How to Protect Yourself? Understanding how inflation affects your savings is a big step in developing strategies to protect your money against devaluation.

Low Bank Interests: Why Aren't They Enough?

Minimum bank interest rates are barely keeping pace with inflation. This discrepancy between the growth of our savings and the increase in prices, known as Negative Real Rate, leaves us in a precarious financial situation.

To truly understand the impact of low bank interest rates, it is crucial to explore the concept of the Negative Real Rate. This disparity between earned interest and inflation quietly erodes the purchasing power of our savings. This gap affects our money over time, and why it's essential to consider investment alternatives that overcome this challenge. We are going to dive into the world of finance and the importance of seeking investment opportunities that offer real and positive returns to protect our assets and ensure a solid financial future.

The Impact of Compound Interest: How Bank Accounts Get Left Behind

Compound interest is like an invisible force that works for investors, multiplying their savings over time. However, in traditional bank accounts, this powerful tool of financial growth fades into insignificance. Let me explain to you why.

Compound interest implies that you not only earn interest on the initial capital you deposited, but also on previously accrued interest. In other words, your profits generate more profits, creating a financial snowball effect. Imagine that you have a sum of money and you earn a certain percentage of interest in it. In the next period, you not only earn interest on your initial amount, but also on the amount you earned previously. With each period, your earnings increase exponentially.

However, traditional bank accounts rarely offer interest rates high enough to take advantage of this phenomenon. In addition, the interest rates they offer rarely exceed the rate of inflation, meaning that your money can lose its purchasing power over time instead of increasing it.

Compound interest is an essential tool for growing your savings significantly in the long term. By investing in options that offer effective compound interest, such as certain types of real estate investments, you can ensure that your money not only grows, but does so at an increasingly rapid pace over time.

Limited Liquidity: How Bank Accounts Restrict Your Access to Funds

One of the most significant drawbacks of traditional bank accounts is their lack of liquidity, a factor that can have a significant impact on your savings and investment opportunities. Liquidity refers to the ability to quickly convert an asset into cash without losing its value, and in this regard, bank accounts are often left behind.

In the context of bank accounts, liquidity refers to the ease with which you can access your funds. In many cases, bank accounts impose time restrictions before you can withdraw large sums of money, especially in savings accounts or certificates of deposit. This means that if a sudden investment opportunity or financial emergency arises, you could face significant delays accessing your own funds.

Investment options such as fixed terms, while common, often have similar limitations in terms of liquidity. Compared to more flexible investment alternatives, such as mutual funds or certain types of real estate investments, traditional bank accounts offer less flexibility in terms of quick and unrestricted access to your funds.

Liquidity is essential to respond in an agile manner to financial opportunities and needs. When considering savings and investment options, it's crucial to evaluate the liquidity of each alternative

Investment Alternatives: The Key to Growing Your Savings

Real Estate Investment is your Passport to Passive Income and Financial Growth, This type of investment, especially through platforms such as Reental, can offer you passive income and significant financial growth.

Protect Your Savings with Strategic Investments, now that you understand why your savings don't grow in a traditional bank account, it's time to act.

Reental offers you an opportunity unique and profitable to grow your savings and ensure a stable financial future. Don't wait any longer to start investing and protect your financial well-being.

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