You're free to use your savings as you see fit. Whether it's for a real estate project, your retirement, a trip or your children's future education. The aim of this article is to highlight the importance of compound interest and to make you aware of the importance of saving.

There s a real difference between someone who saves in a compound interest system and someone who leaves their savings in a current account or low-interest savings plan:
- The person who saves in a compound interest system will have more money than the person who does not.

To illustrate this example, we need to take inflation⁽¹⁾ into account:
Over the last ten years, U.S. inflation has averaged 2.97% per year, or 29,97% over 10 years.

If someone leaves their money in the bank or saves at a low rate (for example, a 1%^APY savings account) their capital will be reduced by the simple fact that the inflation rate is higher than the interest rate granted by the savings account.
⁽¹⁾loss of purchasing power in fiat currencies due to the general rise in prices over time.

Here's an example:
- A person A who saves $20,000 with a fixed interest rate of 7% per year will have a capital of $77,393.69 at the end of 20 years. That's 3.87 times the initial amount.
- A person B not saving the same $20.000 and experiencing inflation of 2.97% will have a buying power of $12,547.05 at the end of 20 years. That s 0,63 times their initial amount.

Although they had invested the same amount at the outset, in 20 years the difference between these two people is $64,846.64.

Now that we know that the first pillar of a successful investment is an interest rate higher than inflation, let's take a look at bitcoin's performance over the last 5 years:

With an average performance over the last 5 years of 103.42%, bitcoin investments are among the most attractive on the market. What's more, the Halving⁽²⁾ mechanism inherent in bitcoin strongly supports the market price and effectively counters inflation by multiplying the production price by a minimum of 2.8.
⁽²⁾ Division by 2 of the rewards received for processing a batch of inter-bitcoin transactions (block). Halving takes place every 4 years..

Let's go back to our calculations, investing 25% of the starting amount in bitcoins:
- A person A who saves $20,000, of which $15,000 in a savings plan with a fixed interest rate of 7%^APY and $5,000 in a BTC5Y savings plan at 7%^APY with a projected performance of 104% on the bitcoin index, will have a capital of €107,791.27 after just 5 years. That's 5.39 times its initial amount

To subscribe to a RAK BTC5Y savings account, simulate your plan using our online calculator by clicking on the link below. Simulate my bitcoin
savings plan now