Choose language

  • de

  • en

  • es

  • fr

  • it

  • pl

  • pt

  • ru

  • uk

  • Deutsch

  • English

  • Español

  • Français

  • Italiano

  • Polski

  • Português

  • Русский

  • Українська

How do you prefer to top up your account?

* We don't charge any commission for making deposits into your account

  • Home
  • FAQ
  • How to Secure Your Funds against Inflationary Pressures

How to Secure Your Funds against Inflationary Pressures

Until recently, most investors were after higher incomes. But now they are more inclined to protect their money from depreciation. There are several methods not only to protect your funds, but to gain a good profit in the meanwhile.

Investments and deposits – as simple as that

Bank deposits are most popular. This is a simple and safe option. Nowadays in Europe, the euro rates do not exceed inflation. So, the average offer for the contribution is 1-2%, which is generally comparable to the level of annual inflation. Thus, bank deposits are a safe, though not so very profitable way to protect your funds against inflation. And you need to keep in mind that the deposit insurance system does not guarantee the entire deposit payoff.

The inextinguishable allure of precious metals

Another common method is purchasing gold and other precious metals. As they say, ‘gold is good because it likes bad news,’ and when all assets plunge, it grows in value. In fact, gold is very much the safety asset. You can invest in it in two ways: open an unallocated bullion account (UBA) or purchase actual ingots, jewelry and bullion coins. The drawback of this investment is that to get a decent income, you need to ‘buy into the gold’ for a long period time, like 5-7 years.

The housing problem

Often, real estate is used as a protection against inflation. After all, the cost of rent and a square meter will increase along with the consumer cost. But the property owners forget about the growing taxes on real estate, the risks of investing in the objects under construction and other unpleasant moments.

Other people's money is not a panacea

Many believe that the purchase of foreign currency can protect them against inflationary pressures. This instrument should be used wisely, since no expert will be able to give an accurate forecast on the currency markets behavior. And instead of an expected income, the investor may face a significant loss.

Contemporary ways of saving: funds, stocks, bonds

And there are also equity instruments. This method is suitable for those who are willing to risk their own funds. For example, you can purchase ETF (Excange Trade Funds). These make it possible to make money on investing in various assets, in stocks, bonds, precious metals, currencies, etc. Moreover, the investor does not need to analyse the stock market, the management company will do it for him.

Those ‘advanced’ in financial issues can independently purchase some blue chips or reliable government bonds. This can be done in the comfort of one's home via our online market or the trading platform Freedom24.

It is necessary to prepare befohand: analyze the market, see which companies are in the trend and which sector is likely to show rising in a certain period. For example, it could be the leading companies in the country or the rapidly growing IT sector. By the way, it is the same as with gold and real estate - buying securities should not be short-term. If the goal is to protect the funds against speculation, that is. In the process, you must ‘go into’ the shares for a period of at least 1-2 years. In this case, the premium may be significant (not only in the form of dividends, but also in the form of capitalization growth of the company itself). Right now on the online market you can invest in shares of European, American and Asian companies: Apple, Google, Facebook, Tata and other global giants.