You must have noticed that as time is passing, the cost of living has been steadily increasing. Additionally, there has been a lot on the news about the rising inflation rate. But the real question is, what exactly is the inflation rate and how does it impact your personal wealth. Read ahead for a better understanding of the concept, and to decide on the preventive measures you can take to ensure your financial security in the long run.
What is market inflation?
Inflation is the measure of the rate at which the average price of goods and services in an economy increases over a predefined period. In simpler words, the rise in the prices where the same amount of money buys lesser than it did in the previous year. Inflation, in a manner, indicates a decrease in the purchasing power of a currency. To explain using an example; if you had the power to purchase a bag of rice at ₹100 last year but the same bag now costs you ₹105; the inflation rate for the financial year is 5%.
How does market inflation impact your saving?
As each year passes and the inflation rate of your country grows, the value of your savings may be negatively affected. It is most detrimental towards cash, as cash of any value will not grow with time. On the other hand, the money you have saved in your bank account will keep on receiving some basic amount of interest. This will help it tackle the inflation rate to an extent. Having said that, usually the rate of inflation is higher than the rate of interest your bank is providing you on your money in the savings account.
Individuals who do not take the inflation rate into account while planning for retirement are impacted the most. This is because not only are they losing their income upon retirement, but are also impacted by the rising costs, despite maintaining the same standard of living. To add to it, they may also have to bear the cost of medical treatments as they age. People who are saving for a financial goal without factoring in the inflation rate, fare no better. The cost for everything rises each year, right from their children's college fees to the property rates. As a good practice, it is important to factor in an average inflation rate before finalizing on the path to achieving your financial goals.
YES Bank Savings Account
YES BANK understands its customers and thus works towards assisting them in reaching their financial goals while offering an attractive rate of interest on their savings. What works for the bank is that they have many types of savings accounts available for their customers. Each kind of savings account caters to a particular need of their account holder and provides them with hassle-free banking solutions. Read below to know more about these savings accounts.
- YES Digital Savings Account- The account for all your daily banking needs from the comfort of your home or office.
- Customizable Savings Account- Allows you to choose your debit card, pricing option, and account benefit packages.
- YES Respect Savings Account- An account aimed at providing targeted benefits to senior citizens.
- YES Grace Savings Account- Aimed at providing women banking convenience from anywhere and anytime. It also offers broader insurance cover.
- XLRATE Savings Account- The account that helps your money grow at an accelerated pace.
- My First YES- Your child's first bank account that helps them learn banking from a young age and provides them with higher returns.
- Savings Value- Provides value for money with higher returns and tax-free income up to ₹40,000.