Should You Keep Cash at Home?

putting cash in envelope

There have recently been posts on social media about keeping cash at home during times of high inflation. You may be wondering if that’s the recommended practice?

Keeping large amounts of cash in envelopes, kitchen drawers or stuffed under the mattress is not recommended during times of inflation—or at any other time. Here are the answers to all of the questions you may have about handling cash during times of inflation.

Why is it a bad idea to keep cash at home?

While it’s perfectly okay to keep some cash at home, storing a large amount of money in your house has two significant disadvantages.

One disadvantage is the money can be lost or stolen. Hiding cash under the mattress, behind a picture frame or anywhere in your house always carries the risk of it being misplaced, damaged or stolen. As careful as you may be, circumstances beyond your control may cause you to lose that money. For example, a worker in your home may find the cash and steal it or a household pests might chew on the bills and render them unusable. Unfortunately, there’s no way to trace or reclaim lost or stolen cash.

Another disadvantage is the money isn’t growing. When cash doesn’t grow, it loses some of its value. This is especially true during times of inflation.

Where is the best place to keep cash?

In times of high inflation, and anytime at all, it’s best to keep the money you don’t need for day-to-day expenses in a place where it can grow. This way, the growth will serve as a hedge against inflation. When inflation is lower, your funds can grow generously, especially if you keep the money in a type of savings account for an extended period of time. Here are some places you may want to keep your cash at this time.

Savings account
A savings account offers a safe and secure place to keep extra funds. When you open a savings account at Partner Colorado, there’s no risk of your money being lost or stolen. Partner Colorado is federally insured up to $250,000 by the National Credit Union Administration. In addition, the money in your savings account will earn interest giving your money an opportunity to grow.

Real estate
The real estate market has experienced an explosion since the pandemic and can be a great hedge against inflation for the savvy investor. Before going this route, though, make sure you have enough cash on hand to manage your property and cover any relevant expenses, such as property taxes, repairs and more. If you’re hesitant to invest in a physical property now, consider owning publicly traded securities instead, or a real estate investment trust (REIT). An REIT is a company that owns, operates or finances income-generating real estate for investors.

Certificate of Deposit (CD)
A CD is a savings account that is federally insured and has a fixed dividend rate and a fixed date of maturity. The dividend rates of these accounts tend to be higher than those on savings accounts, and there’s generally no monthly fee to keep the certificate open. The fixed dividend rate will remain unaffected by the national interest rate, which can fluctuate tremendously during times of high inflation.

For a limited time, you can open a new Partner Colorado CD and score our highest rates in years, up to 3.40% APY on a 38-month CD!* Plus, IRA CD options to help boost your retirement savings.

Inflation is high, but that doesn’t mean it’s a good idea to hoard your cash at home. Follow the tips outlined above to find the perfect place to stash your cash.



*APY=Annual Percentage Yield. The minimum balance to open and earn the advertised interest rates of 2.35% APY for 15 months, 2.85% APY for 22 months and 3.40% APY for 38 months is $500.00. Upon maturity, the 15-month CD will revert to a regular 12-month CD and will earn the APY in effect at the time. The 22-month CD will revert to the regular 24-month CD and will earn the APY in effect at the time. The 38-month CD will revert to the regular 36-month CD and will earn the APY in effect at the time. Penalties will be imposed for early withdrawals. A penalty equal to 90 days of interest will be assessed on early withdrawals for CD terms of 12 months or less, and a penalty equal to 180 days of interest will be assessed for CD terms over 12 months. This includes interest-only withdrawals. Penalties could reduce earnings and principal. IRA certificates are subject to the same penalties and may be subject to additional early withdrawal penalties. Promotional rates are effective as of September 1, 2022. Rates are subject to change without notice. Certain conditions and restrictions may apply.