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 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. 
  • 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 8.5%. 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 $985 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 vehicle 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 , there’s no risk of your money being lost or stolen. [ is federally insured up to $250,000 by the National Credit Union Administration] [and independently insured up to $XXXX by XXXX]. In addition, the average interest rate at a credit union savings account is currently 0.09%APY*, giving your money a great way to grow. 
  • Real estate. The real estate market has experienced an explosion since the coronavirus pandemic and can be a great hedge 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. If you’re hesitant to invest in a physical property now, consider owning publicly traded securities instead, or a real estate investment trust (REIT). An REIT is a company that owns, operates or finances income-generating real estate for investors. 
  • 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. 

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. 

* APY = Annual Percentage Yield

Your Turn: How are you protecting your savings against inflation? Tell us about it in the comments. 


Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.