Credit union helps members fight off inflation

Much has been said about inflation in recent months—it's stubbornly high and it's not going away anytime soon. But how does inflation impact the average Utahn trying to save money?

Simply put, inflation is an increase in average prices for goods and services in the economy. When prices rise, purchasing power decreases. Consumers spend more money for the exact same goods and services. This rise in prices can be tracked over time and expressed as a percentage increase. According to an article by Penelope Wang for Consumer Reports, inflation recently surged to an annual rate of 8.5 percent—the biggest increase in almost 40 years.

In addition to making everything more expensive, inflation also has a profound impact on savings. It takes more money to buy just about everything, decreasing consumers' overall ability to save. Food prices, for example, have increased by 11.4% year over year—the largest 12-month increase since 1979, according to the Bureau of Labor Statistics. In addition, traditional savings accounts have less earning power in an inflated economy, as inflation outpaces most returns.

So, what can the average Utahn do to fight inflation? One credit union is helping its members take money matters into their own hands to combat inflation with flexible term deposit accounts that exceed earnings on ordinary savings.

Smarter savings to fight inflation

Utah First Credit Union, a financial institution founded in Utah in 1935, understands the impact of inflation on its members. With less spending power and fewer safe places to invest savings, Utah First offers great rates on term deposits and other savings accounts to help members save a little extra and fight inflation.

With this great interest rate, no matter how long members decide to stash their cash—as short as one year, or as long as five years—Utah First is hoping to give Utahns an advantage in an inflated economy, providing them with a risk-free investment, guaranteed growth, and a flexible savings plan in uncertain economic times. Plus, with compounding interest, the longer members choose to deposit their savings, the more money they'll earn.

Risk-free investing

There are lots of ways to invest, but in an inflated economy, options and earning power are somewhat limited. Some financial experts suggest investing in stocks or bonds to beat the rate of inflation in the long term. The theory is that broader stock market indexes rise over the long run, outpacing inflation, according to a Forbes article. But investing in the stock market offers no guarantees, and investors may actually lose money in the short term. On top of that, CNBC reports the stock market recently closed at a new low for 2022 and is down about 20% from the beginning of the year.

Nearly every investment carries some risk, but a term deposit is the rare investment vehicle that's totally risk-free. It's backed by the federal government, so investors can stash their cash for a set term with peace of mind and the promise of future return.

The Utah First term deposit gives members the opportunity to invest their money for one to five years with guaranteed growth. It's a sure thing. Members can calculate, to the exact decimal point, how much they'll earn at the end of their term, depending on the amount of the deposit.

Flexible savings plan

The Federal Reserve is doing its part to fight inflation by raising interest rates on borrowed money, which has a cooling effect on consumer spending. (When consumers spend less money, the supply for goods and services should theoretically rise.) In economic terms, when supply exceeds demand, prices fall.

Notwithstanding actions from the Federal Reserve, consumers can cool inflation on their own terms by opting to save instead of spend. When consumers spend less money on non-essential purchases, they control their own purchasing power—refusing to forfeit their money to the throes of inflation.

But inflation has equal impact on savings and spending. By putting money in a term deposit, consumers can outpace ordinary savings accounts that may diminish the value of their money in an inflated market. With great rates and guaranteed growth, Utah First is giving its members a savings vehicle that helps them earn more interest and save more money.

Fight inflation

With great rates on one- to five-year term deposits, Utah First is helping members fight inflation and save money at their own pace. If you're looking for a flexible, risk-free savings plan with guaranteed growth, reach out to a financial expert at Utah First to see if a term deposit is right for you.

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