Should I Keep Cash at Home?

Authored By: Community Financial Credit Union on 8/23/2022

Hundred dollar bills stuffed under a mattress.We’ve all heard of a family member or friend who swears keeping cash at home is safer than in a bank or credit union, especially during times of inflation. While it may be tempting to hide away your nest egg in your sock drawer or stuffed under the mattress, keeping large amounts of money at home is one of the riskiest ways to keep your cash.

To safeguard your funds and your peace of mind, Community Financial is here to answer all of your questions about handling cash during times of inflation.

Why is it a bad idea to keep cash at home?

While it’s perfectly OK to keep some cash at home, storing a large amount of funds in your house has two significant disadvantages:

  • The money can be lost or stolen. Hiding cash under the mattress, behind a picture frame, or anywhere else in your house always carries the risk of it being misplaced, damaged, or stolen. As careful as you may be, circumstances beyond your control may cause you to lose that money. For example, a worker in your home may find the cash and steal it, household pests might chew on the bills and render them unusable, or your cash-strapped teen might decide the money is there to pay for their own entertainment expenses. Unfortunately, there is no way to trace or reclaim lost or stolen cash and this generally isn’t covered by insurance in the case of fire, flood, or other natural disasters.
  • The money isn’t growing. When cash doesn’t grow, it loses some of its value. This is especially true during times of rapid inflation. The current inflation rate is hovering at approximately 9%. This means if you keep $1,000 at home for the next year and inflation remains at this rate throughout that time, your cash would be worth only $910 in one year’s time. Of course, if inflation rates increase, the loss would increase as well.

Where is the best place to keep cash?

In times of high inflation, and anytime at all, it’s best to keep the money you don’t need for day-to-day expenses in a place where it can grow. This way, the growth will serve as a hedge against inflation. When inflation is lower, your funds can grow generously, especially if you keep the money in a savings product for an extended period of time. Here are some places you may want to keep your cash at this time:

  • Savings account. A savings account offers a safe and secure place to keep extra funds. When you open a savings account at Community Financial, there’s no risk of your money being lost or stolen. Community Financial is federally insured up to $250,000 by the National Credit Union Administration (NCUA) and offers multiple savings products to fit your particular needs, including our new Grow Your Change Savings!
  • Real estate. The real estate market has experienced an explosion since the coronavirus pandemic and can be a mechanism against inflation for the savvy investor. Before going this route though, make sure you have enough cash on hand to manage your property and cover any relevant expenses, such as property taxes, repairs, and more.
  • Precious metals. Precious metals, like gold, silver, and platinum, have proven to hold their value even in times of inflation and a volatile stock market.
  • Share certificates. A share certificate is a savings account that is federally insured and has a fixed dividend rate and a fixed date of maturity. The dividend rates of these accounts tend to be higher than those on savings accounts, and there is generally no monthly fee to keep the certificate open. The fixed dividend rate will remain unaffected by the national interest rate, which can fluctuate tremendously during times of high inflation. You can view Community Financial’s current certificate rates by visiting our website or reaching out to the phone number below.

Inflation is high, but that doesn’t mean it’s a good idea to hoard your cash at home. Follow the tips outlined above to find the perfect place to park your cash. Looking for some extra help navigating your financial safety? Reach out to our Member Contact Center at (877) 937-2328 or visit one of our branches to speak to a Member Representative today!


* APY = Annual Percentage Yield

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