How much cash should i keep in the bank?


This post is part of the Real Money Moves series: actions everyday people can take to align their money and values.Follow

Most people have been taught the virtues of saving for a rainy day. But want to hear something crazy? When you put money in the bank nowadays, you usually LOSE money.

Wait a minute, how does that work? The problem is that when interest rates — what the bank pays you in exchange for making a deposit — is lower than inflation — the rate at which money loses value — that means your money is actually worth LESS in the future than it is now.

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So it’s not that you put in $100 and get out $98… but that the $100 you worked so hard to save can only can buy $98 worth of stuff, what the economists call your purchasing power. That’s why investors talk about “beating inflation” — interest rates and inflation are in a race to make you money, and steal your purchasing power. You’re Superman and ready to fly, but inflation is the kryptonite dragging you down. And right now, inflation is winning at 2.1% for 2018 so far versus the average mainstream bank 3 month CD which pays as little as .02%.

That doesn’t mean saving is bad — its still how we get enough money together for important things in life like weddings, a first home, or a family emergency. And putting money in the bank is, needless to say, a lot safer than keeping it under the mattress.

So where can you get a better interest rate — a stronger sword in the battle against inflation — and still keep your money safe?

You might be surprised to find out that the world of social investing has some pretty great options available.

For instance, CNote is a newer company that allows you to put away your money and receive a 2.5% annual return — up to 20 times more than mainstream banks, with the same liquidity as a 3-month CD!

Investment Options with Short-Term Liquidity


As we explored in Breaking up is Hard To Do: How to Leave Your Big Name Bank the other major advantage of something like CNote is that you get to know, and be proud of, where your money spends the night — supporting low-income housing, businesses led by women and people of color, and other socially positive concepts — rather than, for instance, investing in the private prisons profiting from family detention and mass incarceration.

Other products out there with comparable financial return include those like Calvert Notes that allow you choose what geography you care about, Media Development Investment Notes that allow you to support independent media in newly democratizing countries, and New Hampshire Community Loan Fund that helps people in mobile homes buy the land underneath them. Unlike banks, these organizations generally interface with the public virtually rather than having to go into a branch — you can sign up on their websites, or just call them up for more information on where to send a check.

Just make sure to check carefully how long they plan on keeping your money — called “tenor” or a “lock-up“ period — as they basically keep your money under lock and key and won’t give it back to you without asking you to pay a penalty. But if you’re really committed to saving for something special, just like your mom kept your piggy bank key, this can be a great way to make sure you don’t spend your wedding money before the actual wedding!

There’s one important distinction to understand as you look at impact investing options for your savings — unless you get a CD at a community bank, the options listed above are not FDIC insured —meaning the government is not insuring your deposits. Instead, typically donors have provided resources that are used as what they call “first loss” — that money would be used to support any losses before the average investor would ever lose money. That’s why the organizations mentioned above — and all but CNote have been around for over 15 years — have NEVER lost a single cent of investor money.

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So if you really don’t like money and want less of it…keep it in the bank.

Otherwise… maybe it’s time to check out social investing.

For more information on social investing strategies, check out

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Disclosures related to my workhere.

Disclaimer: Taking a dose of her own medicine, the author keeps some savings with the Media Development Investment Fund. She, nor anyone else, receives compensation their being listed here, and in general, any information provided is solely as financial education — it is neither a recommendation nor an offer of securities. As always ask your advisor what is right for you.


I am an investor and activist who has been building bridges between finance and social justice for close to twenty years. In that time, I"ve influenced over $150 Billion and helped thousands of people learn how to align their money with their values. My book, Real Impact: The New Economics of Social Change offers guidance on creating real, systemic change in the world and has been featured everywhere from Harvard Business School to the United Nations. I currently serve as Founding Partner of Candide Group, a Registered Investment Advisor in Oakland, CA. I"m also an adjunct professor at Middlebury College"s graduate program, an avid dancer and a Swarthmore alumna. Learn more and contact me at,or add me on social media: