Money in Account and Inflation — How Much Are You Really Losing?
How much do you lose keeping cash in bank account? Concrete calculations showing real cost of inflation for your savings — with numerical examples.
7 min czytaniaThe Problem Invisible on Bank Statement
Your bank account shows the same amount as last month. But that's an illusion — the real value of your money drops every day. This is what inflation does: it doesn't take away your PLN, but takes away what you can buy with them.
How Much Exactly Are You Losing? Numerical Examples
Let's assume you have 100,000 PLN in savings account earning 2% annually (after Belka tax: 1.62%).
Scenario 1: 4% Inflation (Moderate)
| Year | Nominal value | Real value (purchasing power) | Real loss |
|---|---|---|---|
| 0 | 100,000 PLN | 100,000 PLN | — |
| 1 | 101,620 PLN | 97,712 PLN | -2,288 PLN |
| 3 | 104,930 PLN | 93,280 PLN | -6,720 PLN |
| 5 | 108,340 PLN | 89,020 PLN | -10,980 PLN |
| 10 | 117,480 PLN | 79,310 PLN | -20,690 PLN |
After 10 years you lose over 20,000 PLN purchasing power — despite seeing more money in account than at start.
Scenario 2: 6% Inflation (Elevated)
| Year | Nominal value | Real value | Real loss |
|---|---|---|---|
| 0 | 100,000 PLN | 100,000 PLN | — |
| 1 | 101,620 PLN | 95,868 PLN | -4,132 PLN |
| 5 | 108,340 PLN | 80,690 PLN | -19,310 PLN |
| 10 | 117,480 PLN | 65,100 PLN | -34,900 PLN |
At 6% inflation after decade real value drops by almost 35,000 PLN. That's a new car's price.
Scenario 3: 10% Inflation (Crisis, Poland 2022–2023)
At peak inflation in Poland, CPI reached 18.4% (February 2023). With 10% average:
- After 1 year: real loss 8,380 PLN
- After 5 years: real loss about 41,000 PLN
- After 10 years: over 62,000 PLN lost purchasing power
Daily Basket — What Gets More Expensive Fastest?
Official CPI is average. In practice, categories where you spend most may get more expensive faster:
- Food — 10–15% annual increases in 2022–2023
- Energy — 20–30% increases after price cap removal
- Services (hairdresser, mechanic, doctor) — 8–12% annual increases
If you're single in city, your "personal inflation" may be higher than official GUS data.
What Can You Do?
Option 1: Inflation-Indexed Bonds
Polish treasury bonds COI (4-year) and EDO (10-year) have interest linked to inflation. First year fixed rate, following years: inflation + margin (e.g., 1–1.75%).
Example: At 4% inflation, EDO bond gives about 5.75% — you beat inflation.
Option 2: ETFs — Long-term Growth
Global stock market historically gives 7–10% annually (before inflation). Even with high inflation, company stocks can pass costs to customers.
Option 3: Fund Split
You don't have to invest everything. Reasonable strategy:
- Emergency fund (3–6 months expenses) — savings account, liquidity
- Inflation protection — COI/EDO bonds
- Capital growth — equity ETFs (5+ year horizon)
Rule: Cash Is Not Savings
Cash in account is liquidity reserve, not wealth-building strategy. Every PLN above emergency fund should work — in bonds, ETFs, or other assets.
How Freenance Can Help?
Freenance shows real return of your portfolio — including inflation. Thanks to this:
- you see if your investments truly earn or just nominally grow
- track cash vs. investments split
- plan with Runway calculator how many months of maintenance you have secured
Want full control over your finances?
Try Freenance for free