Question

If savings account interest rates are very low, then every dollar you deposit may earn little or almost no interest. At the same time, increasing prices of consumer goods mean that you can buy less with a dollar tomorrow than you could today. If you choose to save your money instead of spend it, are you actually losing money?

Answer 1

Yes, because you need to buy consumer goods like food and water, and if you buy now you will at a lower cost than you would in the future (for more). By keeping it in your savings at a low interest rate, you are not offsetting the money being lost.

Answer 2

@hipoh17 Does that make sense?

Answer 3

yes thank you!