An ATM dispensing money
An ATM dispensing money

Savers are losers: Why you shouldn’t leave money in savings account

For many generations, saving money has been the go-to strategy for building wealth. However, in today's economic climate where inflation is so high and interest rates are not matching up, savers could end up being losers.

Interest rates are very low now, leaving your money in a savings account is unlikely to generate significant returns and not a rational thing an investor would want to do. At this point, because an investor may lack market information, he or she must get closer to your investment advisor or bank. 

It is the time these two are needed most because they can easily analyse the market and explain in simple terms what the information needed for decision on hard-earned money. 

You deserve to know the current state of economic activities, what the government is doing to remedy the economic challenges and any other thing that would enhance a useful decision. Saving money, is not the ideal way to go in these challenging economic times.

There are investments generating good returns, matched closely with inflation, if government policies and market conditions improve.
Here's why you should consider alternative investment strategies:


Inflation is the rate at which the general level of prices of goods and services increase. It erodes the purchasing power of your money over time. If the inflation rate is higher than the interest rate on your savings account, you're effectively losing money. According to the Ghana statistical service, inflation rate for the month of March has declined to 45 per cent, much higher than interest rates.

The question I want you to ask yourself today is how much loss you are willing to cut because the average savings account deposit rate is about seven to eight per cent, as of December 2022, there are collective  investment schemes generating a year-to-date return of about 25 per cent to 30 per cent etc.

Low-interest rates

Interest rates on savings accounts have been at record lows in recent years. This means that the returns on your savings are minimal, and you may not even keep pace with inflation. You may end up losing money in real terms if you leave your money in a savings account. Between 2013 to 2022, interest rates average about 7 to 8 per cent according to the bank of Ghana.

Opportunity cost

The opportunity cost of an investment is the return that you could have earned if you had invested your money elsewhere. By leaving your money in a savings account, you're missing out on the opportunity to invest in other assets that have the potential to generate higher returns.

For example, investing in mutual funds, stocks, and real estate can provide greater returns than a savings account.


While savings accounts are considered safe investments, they offer little to no risk. This means that the returns are minimal, and there is no potential for growth. Other investment strategies, such as mutual funds and stocks, carry a higher risk but also have the potential for greater returns. 

It's important to understand the risks and potential returns associated with any investment strategy before making an informed decision.
So, what are the alternatives to a savings account?

Collective investment schemes

These are investment funds that pool money from multiple investors to invest in a variety of financial assets, such as stocks, bonds and real estate. The money invested by each investor is used to buy units or shares in the fund and the returns are distributed based on the number of units or shares owned. 

There are new schemes now, investing in other African jurisdictions with good investment prospects. You can take advantage of the low unit price (About 0.60 Ghana pesewas).

Stocks and bonds

Investing in stocks and bonds is riskier than a savings account, but it also offers the potential for higher returns. It's important to diversify your portfolio and invest in a mix of stocks and bonds to minimise risk.

Real estate

Real estate is another investment option that has the potential for high returns. However, it also carries significant risks, such as market fluctuations and property damage. It's essential to research the market and invest in properties that are likely to generate positive cash flow.

Also, note that the real estate business is all about location.

In conclusion, savers would be losers in today's economic climate. Leaving your money in a savings account is unlikely to generate significant returns, and you may even lose money in real terms due to inflation. Consider alternative investment strategies, such as collective investment schemes, stocks, or real estate, to build wealth over time. 

Remember to diversify your portfolio and understand the risks and potential returns associated with any investment strategy before making an informed decision.

The writer is an investment banker. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

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