Interest is money paid at a particular rate for the use of loaned money. You may wonder why the gold you hold with Glint earns no interest. It’s simple – to earn interest, the gold has to be loaned out. We can’t lend your gold, precisely because you are the owner, not us. Your gold sits in the Brinks vault in Switzerland, safe from everything and everyone. If we could lend your gold, that would entail us taking a risk with what is yours. We don’t have that right.
So it’s a better idea to put your wealth into pounds, or dollars, or euros, right? Even with interest rates as low as they are right now, a little bit of money earned by interest is better than nothing, surely
Wrong. A typical savings account today gives around 2% on a cash deposit. So for every $100 or £100 saved over a year, you will get $2 or £2.
Meanwhile, over the same year the inflation target set by the US Federal Reserve or the Bank of England is also 2%. So your £100 or $100 will have lost 2% of its value, which means the £2 or $2 earned through interest will just keep you standing still.
In the last 50 years the £ and the $ and in fact all paper currencies have lost more than 80% of their purchasing power because of inflation.
Before trusting in paper money, think of gold. Over those same five decades gold has grown in value by more than 500%, protecting you and your wealth against inflation.