Inflation is a major reason why GHC 10 next year will get you less waakye than it could get you today. It weakens the purchasing power of money. This year, the Bank of Ghana estimates inflation to be 10%. This means that the purchasing power of any amount will decrease by 10%.
The breakdown…
Let’s use the ever-faithful GHC 1 to get a better grasp of this. Without the effect of inflation, your GHC 1 will have no problem getting you everything that GHC 1 can rightly buy. Once inflation sneaks up on it though, your GHC 1 will have a purchasing power of only 90P because of the10% it loses in value from inflation. Aside from you having to pay more to fill your car’s tank or buy your morning tea bread because of inflation, it also does major damage to your money in a savings or current account.
Inflation and your bank account
Still with our GHC 1, if you put this amount into a savings account, it will grow by a maximum of 6% over the year, depending on whatever interest rate your bank gives you. That’s 6% less than Ghana’s inflation rate! Do the math and you’ll realize that “growth” is effectively a loss. Oh, what’s that you said? You have a current account? Well then please accept our deepest condolences on the tragic loss of your money. Your bank charges you monthly for keeping that current account active and you also run the risk of ending up owing your bank when the balance falls below the level of all the deductions on it. Even if you are able to maintain your GHC 1 in your current account, it could be worth only 50P by December. Ouch.
Inflation and Investing
By now you’ve probably figured out that investors who earn less than the rate of inflation on their investments also lose value on their money. Like we said in the beginning, inflation can’t be avoided. That doesn’t mean you can’t get the upper hand over it, but as you’ve clearly seen, that won’t happen with your bank. It can happen though. This is where DALEX SWIFT comes in.
With DALEX SWIFT, you get up to 16% on your money, plus the added advantage of compounding interest! So not only are you beating the rate of inflation so your money doesn’t lose value, the interest is paid is on your principal PLUS the previous month’s interest earnings every single month. That’s the compounding advantage!
Your money in the bank can do better with us. We’re ready when you are.
Leave your details below. You can also call 721 now on any network and talk to an expert whose only job is to give you free consultation.
