Safeguarding your existing savings — Why Do It?

According to the FDIC, the national average interest rate on savings accounts stands at 0.13% APY. This is disastrously low, considering that the rate of US inflation last year stood at a whopping 8.2%. This means that without cashback and reward schemes, or favourable APYs paid out by certain banks that often require you to lock in your funds for a year or two, the real value of your savings will be decreasing year on year. Many people know about this and are concerned, and they are trying to combat this. So, what are the main ways in which people safeguard their savings?

Locked Savings Accounts

More and more people are turning towards high-interest-locked accounts such as BLME. By locking their savings, one can gain a 4.60% return on their investment per year. Although this APY is considerable when we compare it to the average of 0.13% in an ordinary savings account, there are a few downsides. The major downside is that throughout the duration of the locked period, the funds cannot be withdrawn or used, meaning there’s no potential for cashback on purchases, and funds cannot be used to invest in different types of assets. To gain 4.60%, an investor must deposit their funds for 7 years. Moreover, while the APY is considerable, this alone does not protect against inflation, which in 2022 alone has been almost double that of the 4.60% that BLME offers per year. In this case, the real value of savings is still falling, even with a maxed-out APY. For many of the reasons aforementioned, locked savings accounts tend to be the route taken by the elderly, who are looking to protect the inheritance of their children from the forces of inflation. For younger people who are more financially active, there’s another option.

Investment Strategies

There tend to be four main strategies that individuals with a little bit of cash in their pockets will engage in. The first one is value investing. This is when you invest in an asset that seems to be undervalued at any moment in time. For example, the value of gold may be unusually low, meaning that buying and holding could generate passive income as the price goes up in the future. The second strategy is growth investing, where investors will usually spot a small company with big potential and purchase their stocks in hope that the company will grow in the future. Strategy three is momentum investing, where upward trends are spotted in time, and stocks are purchased to ‘hop on the bandwagon’, so to speak. Lastly, there’s dollar-cost averaging, where every month, an investor would buy a certain amount of a number of assets every month over a long period of time, for example, in hope that regardless of the market, there will be a slow upward trend over a number of years. In each of these methods, savvy investors will hope to make much higher returns than their counterparts engaging in locked savings. However, the biggest downside to opportunistic investing is that there is a great amount of risk that comes with it, not to mention the time it takes to research and learn to spot trends. However, when it comes to dollar cost averaging, it gets a little easier; you might choose to dollar cost averaging with technologies that you know will become slowly more prominent as we move further into Web3, such as the blockchain. For those interested in the aforementioned, there’s another option.

Cryptocurrencies

Cryptocurrencies can be bought and sold like any other asset, only as the majority are unbacked, they can be extremely volatile. Interestingly enough, however, as the blockchain becomes more prominent across the board as an effective, decentralized payment medium, playing a key role in Web3, there’s no surprise that we’ve seen a constant upward trend in the value of the major cryptocurrencies since their inception. Regardless of the bear market, there’s still an observable upward trend. This makes them perfect for dollar cost averaging, which we spoke about earlier.

However, what if there was a way to combine the best aspects of all of these methods that exist to safeguard one’s savings?

Blackcatcard

Blackcatcard is a mobile bank with prepaid debit cards and integrated cryptroservice and one main focus — to safeguard investments while remaining cheap, convenient, and secure.

If we move back to the idea of getting a good annual income on your savings, Blackcatcard offers a 2.2% annual rate on your balance. We ought to stress here that you can gain this annual income on your balance while still having full access to your funds; there’s no need to worry about locking your funds away for 7 years. This is very important as with Blackcatcard purchases, you can gain up to 5% cashback on assets. There’s even a CashBack Wheel where you can reclaim up to 7% on purchases. Combined with the aforementioned annual on your balance and the fact that there are no hidden fees and 5 free outgoing SEPA transfers a month, it’s possible to not only guard your savings against the forces of inflation but multiply them passively. By the way, incoming SEPA transfers are absolutely free.

Security is also a big factor here, as many people are concerned about investing in crypto due to not having enough experience with decentralization. Not only does Blackcatcard keep your private keys safe for you so you don’t lose them, but it uses modern protocols that not only guarantee the security of your fiat funds but your crypto funds too. With 24/7 support as standard, working with crypto for the first time has never been easier.

Lastly, in terms of standard fees, Blackcatcard comes out on top. Whereas foreign transaction fees charged by standard financial institutions can hit 5% in some instances, all withdrawals within the EU are free when using Blackcatcard.

Indeed, there’s no wonder that this platform is gaining momentum; it combines the three ways in which users safeguard their money from the forces of inflation — high annual incomes, opportunities for investment, and access to the world of crypto. If you’d like to learn more about what Blackcatcard can offer you, check out the link below.

https://blackcatcard.com/