Money in the bank, how to invest and defend yourself against inflation: from deposit accounts to (short-term) government bonds. Options

Alternatives to checking accounts

Doubts about the stability of the banking system. The impervious path of central banks, caught between the fight against inflation, more difficult to tame than expected, and the uncertain impact of monetary tightening on the economy. Which, in turn, makes the earnings trajectory and share price dynamics vulnerable. These are the unknowns that today fuel the temptation to seek refuge in liquidity: away from the markets – especially from the stock exchanges – waiting for an improvement capable of restoring investor confidence. The good news is that today, unlike a few months ago, liquidity pays off. Not on the current account, where cash, on the contrary, undergoes the constant, inexorable erosion of purchasing power due to inflation, at a rate close to 9%, on an annual basis. There are, however, three alternatives for those who want to put liquidity to good use: deposit accounts, monetary funds and short-term government bonds. Warning: here too inflation bites, as indeed it does on all financial assets, shares, bonds, currencies, raw materials. But at least, it hurts a little less, thanks to much more competitive yields than a few months ago, thanks to the intervention of the European Central Bank, which raised the reference rates by 3.5 percentage points, starting from last July.

Mar 27, 2023

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