- Savings accounts today offer the highest yields in 15 years
- Even so, they may not be the best way to protect your savings from inflation
(The Burning Platform)—When the Fed raises interest rates to curb inflation, ripple effects spread across the economy. Some of the impacts are negative (especially if you owe a lot of money), but others are positive for savers.
Today, let’s take a break from exploring the downsides of higher interest rates. Let’s focus on the positive.
If you’re prudent, you undoubtedly have some extra money tucked away in a savings account at a bank or credit union. Savings accounts are typically used for household emergency funds, cash set aside for short-term expenses like a big vacation, a significant home improvement (or down payment on a home) – that sort of thing.
Recently, setting aside cash in a savings account got a lot more attractive:
Not long ago, it was common to earn low returns on cash – less than 1%.
But after the Federal Reserve embarked on a series of interest rate increases to tamp down inflation, that has changed. Now, investors may get as much as 5% or more interest on their savings – the most they have been able to earn in about 15 years.
“What I hear from advisors these days is the phrase, ‘This is real money now,’” said Michael Halloran…
Just one year ago, Dr. Ron Paul calculated exactly how much the Fed’s interest rate repression was costing us. For example:
…banks are paying less than 1% APY on CDs and savings accounts, on average, while inflation is 9.1%.
What a difference a year makes!
At 5% APY (annual percentage yield, or “yield”), the most generous savings accounts are actually outperforming inflation – most recently reported at 3.7% year-over-year.
- A positive after-inflation return on your cash?
- Liquidity on demand?
- Insured by the FDIC?
- What’s not to like?
If only we could take these benefits at face value…
The drawbacks of savings accounts
Unfortunately, offering 5% APY on your savings isn’t something banks are just offering you for free. If you have an existing savings account, don’t expect a complimentary upgrade to your APY. For example, here’s the current yield on my personal savings account:
You’ll probably have to shop around, but if you do you can find an account offering 4.75%-5.25% APY. But should you? Switching banks (even opening a new savings account online) can be a hassle. Is it worth it? Well, there are two reasons banks offer high yields on savings accounts:
- To attract new customers, and entice them into opening a savings account (which, they hope, will lead to a profitable relationship)
- To attract new deposits, which they desperately need
Don’t forget, the entire banking sector is still dealing with unrealized losses on their reserves – more today than in March, when SVB and Signature banks suddenly failed:
Banks can borrow money from the Federal Reserve BTFP fund, which costs them 5.55% today. Why wouldn’t they offer savers a bit less to fill a hole on their balance sheets? From that perspective, a 5% APY savings account rate doesn’t look quite so attractive…
Even if the worst occurred – you opened a savings account with a bank that promptly collapsed – your deposit would be insured by the FDIC. Right?
…there are limits to those protections. Depositors generally have up to $250,000 of coverage per bank, per account ownership category through the FDIC.
When banking troubles cropped up earlier this year, the federal government stepped in as a backstop regardless of those limits. But savers should not count on that happening again.
Stay under those FDIC insurance limits, folks!
Fortunately, the FDIC maintains a significant deposit insurance fund (DIF). Unfortunately, the DIF has only $116 billion on-hand. That sounds like a lot, until we compare it to the $17.2 trillion currently on deposit in banks nationwide (about 40% or $7 trillion of that total is uninsured). If the deposit insurance fund is depleted, the Federal Reserve can always print more money to make up the difference. Which would cause inflation, naturally… Even in a worst-case scenario, you’d get your money back eventually, but you might need to wait on an act of Congress to make it happen.
But we’ve been starved for yield on our savings for so long, a 5% APY might be enough to encourage even the most skeptical to open up a savings account.
One more point to ponder – if we factor inflation into our calculations, how much after-inflation yield are we earning? Less than you’d think…
“Real” returns or a mirage?
The number one enemy of cash is inflation.
The phrase “real return” means what’s left over after subtracting the corrosive effects of inflation on your cash. As I said earlier, the official CPI is currently 3.7% per year.
Pause for just a moment and ask yourself whether that 3.7% increase in the cost of living accurately reflects your own expenses? For most Americans, the answer is a resounding No. That’s because CPI or “headline inflation” isn’t terribly accurate.
Absent a deeper dive into the politics of inflation calculations, consider this. If we were to use the Federal Reserve’s own price index procedures from the 1980s (before substitution hocus-pocus were allowed to corrupt the data), inflation would measure about 12.5%.
That would also mean any cash stashed in a 5% APY savings account would actually cost you 7.5% of your purchasing power…
Listen: Liquidity is great. Insurance on up to $250,000 in savings? Outstanding. Even when a bank collapses, the FDIC generally figures out a way to make insured deposits available within a day or two. Are those privileges worth a -7.5% return on investment? Maybe it’s time to consider a more inflation-resistant form of saving…
Inflation burns up dollars, but it can’t touch this
Whether you put your hard-earned cash in a savings account is totally up to you. So long as you’re aware of how much you’re really paying for liquidity and deposit insurance.
Savings accounts aren’t the only solution, though.
Consider the benefits of physical gold and silver. They’re not only resistant to inflation, they’re also historical safe-haven assets. Instead of a misleading APY, physical precious metals offer you long-term stability that can’t be inflated away. Gold and silver are almost as liquid as cash in the bank. And your physical precious metals are your property (unlike a bank deposit, which is a bank liability or IOU to you, the customer). Gold and silver cannot default, cannot go bankrupt. Ever.
Savings accounts are supposed to offer low risk and low reward. Right now, it seems to me they offer a combination of low risk and guaranteed loss of purchasing power instead.
There are two ways to own gold and silver. You can purchase them and have them delivered to your home. Or, you can use the retirement savings funds you’ve already set aside for your future to open a Precious Metals IRA.
Why Bullion Beats Numismatics and Collectible for Your Safe or IRA
Precious metals continue to attract Americans seeking reliable ways to protect their wealth amid inflation, geopolitical risks, and stock market swings. Whether stored in a home safe or held inside a self-directed IRA, physical gold and silver deliver tangible value that paper or digital assets often lack. Yet investors must choose carefully between bullion—pure bars and coins valued mainly for their metal content—and numismatics or collectibles, where rarity, history, and collector demand heavily influence pricing.
Advisor Bullion serves as a dependable source for straightforward, high-quality bullion. The company specializes in physical gold, silver, platinum, and palladium, emphasizing transparent pricing and products that deliver maximum metal content for every dollar spent. This approach makes it ideal for both personal holdings and retirement accounts.
Bullion consists of refined precious metals in standard forms like one-ounce coins (American Gold Eagles, Silver Eagles, Canadian Maple Leafs) or bars. Their value tracks closely to the current spot price of the metal. A typical gold bullion coin trades near the live gold spot price plus a small premium. This structure keeps costs clear and predictable.
Numismatic coins and collectibles add substantial value from factors such as age, rarity, minting errors, or historical significance. A pre-1933 U.S. gold coin or graded proof piece can carry premiums of 30%, 50%, or even 200% above melt value. While this appeals to hobbyists, it creates complexity. Pricing depends on subjective grading, collector trends, and auction results instead of daily spot prices.
For investors focused on wealth preservation and retirement security rather than building a collection, bullion often delivers better results.
Lower Costs and Better Liquidity for Home Storage
When keeping metals in a home safe or private vault, liquidity and efficiency count. Bullion offers clear benefits:
- You acquire more actual gold or silver per dollar invested. Numismatics divert a large share of your money into rarity premiums and massive sales commission, reducing your metal exposure.
- Selling bullion involves tight bid-ask spreads, so you recover nearly full spot value with minimal fees. Collectibles require finding the right buyer and may sell at a discount if demand for that specific item weakens.
- Bullion prices remain transparent and update with global spot markets. You can track gold near current levels or silver accordingly and know exactly where your holdings stand. Numismatic values are priced by the Gold IRA companies with hefty margins applied.
- Standardized coins and bars store efficiently and divide easily for partial sales. Rare coins often need protective slabs and controlled conditions, adding hassle and expense.
- Bullion enjoys worldwide acceptance. A 1-oz Gold Maple Leaf or Silver Eagle sells quickly to dealers anywhere. Niche numismatic pieces may appeal only to limited buyers, slowing liquidation when speed matters.
In times when quick access to value becomes important, bullion’s simplicity stands out.
Stronger Fit for Precious Metals IRAs
Precious metals IRAs continue gaining traction as investors diversify retirement portfolios beyond stocks and bonds. IRS rules permit certain bullion products in self-directed IRAs if they meet purity standards (.995 fine for gold, .999 for silver) and are held by an approved custodian. Eligible items include American Gold and Silver Eagles plus many generic bars and rounds from recognized mints.
Numismatic and most collectible coins generally face heavy scrutiny from custodians due to valuation disputes and elevated markups. These higher premiums mean less actual metal ends up working inside the account.
Bullion avoids these issues. Its value links directly to verifiable spot prices, which simplifies reporting and lowers the risk of regulatory challenges. More of your IRA contribution purchases real metal instead of dealer profits or speculative upside. Over time, owning additional ounces that appreciate with the metal itself can create meaningful outperformance compared with high-premium alternatives that deliver fewer ounces.
Regulatory guidance from the CFTC and state securities offices repeatedly cautions against aggressive sales of expensive numismatics or “semi-numismatic” coins for IRAs. For retirement planning, transparent bullion from established providers reduces risk and aligns better with long-term goals.
How to Get Started with Bullion
Begin by clarifying your goals. Are you protecting savings in a safe, or moving part of a retirement account into a precious metals IRA? Focus on the number of ounces you can acquire at current prices rather than chasing marked-up collectibles.
Diversify sensibly: use gold for core preservation and silver for its blend of industrial and monetary qualities. Mix coins for easier divisibility with bars for lower per-ounce costs on larger buys. Arrange secure storage—whether at home with proper insurance or through professional facilities.
As economic uncertainties linger and faith in conventional assets erodes, bullion continues proving its worth as a dependable store of value. Its direct approach avoids the hype that sometimes surrounds collectible markets and keeps the focus on the metal itself.
For investors prepared to strengthen their portfolios, Advisor Bullion supplies the expertise and selection needed to acquire high-quality bullion efficiently. Whether building personal holdings or integrating metals into an IRA, their emphasis on transparent, investment-grade products helps secure more ounces today that support greater financial security tomorrow. In a complicated financial landscape, bullion’s clarity and reliability make it the smarter foundation for protecting what matters most.