Whilst keeping your money in the bank is a good choice for emergency funds, it may not be the best option for long-term savings.

In the 1980s, while interest rates soared, leaving money in a bank account provided a reasonable return. But the economic environment has now changed. Keeping your money in the bank indefinitely is no longer the attractive investment option it once was, because of lower interest rates and higher bank fees.

Although bank accounts are secure, over time the real value of your money can actually decrease, as inflation erodes the purchasing power of your money.

We all experience the effects of inflation through the ever-increasing cost of living. That’s why careful investment of your money is so important.

Your money needs to grow at a rate greater than inflation in order to resist erosion. For example, let’s say inflation is running at four per cent per year and your money is earning five per cent - your real return after inflation is only one per cent. After tax and any fees are taken into account, your savings could effectively be going backwards.