Inflation is running rampant at 40-year highs, so how do people keep their savings on track when traditional savings accounts haven't been up to the task for decades? In an interview on Motley Fool Live, recorded on June 22, Danetha Doe, an economist at Clever Real Estate and the creator of Money & Mimosas, gives Motley Fool contributor Marc Rapport some tips.
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Danetha Doe: Savings rates have been negligible for decades. I haven't experienced a savings account that actually kept up with inflation. If I were a policymaker, honestly, that would be one of the things that I would want to implement, that savings rates have to at least be at the rate of inflation. But now, it would have to be at least that 8%, ideally outpacing that. So what does a person to do during this time period? There are I Bonds that you could look into. Treasury I Bonds, those are currently at 7%. So not quite inflation, but certainly much better than the 1% or less savings that you are seeing. There's also an interesting opportunity for folks that are interested in regenerative agriculture, a company called Steward, where you can be a lender to small farmers, or small farms across the country, across the United States. You loan them money through this platform called Steward and your loan gives you a return of 4.5% and you're paid that back after six months of that loan. So there's some creative ways to go about this -- 4.5% still doesn't match inflation, but again, it's much higher than any savings account.
Marc Rapport: Yeah. Now, those I Bonds you're talking about, those are backed by the federal government, aren't they?
Danetha Doe: Yeah. Those are the Treasury Department. They instituted that in the middle of the initial onset of the pandemic. So late 2020, 2021, to encourage folks to invest in federal government projects. Yeah, so Treasury I Bonds, if you just Google that, you'll find it.