New Delhi. Inflation means a general increase in the prices of goods and services over time, which reduces the purchasing power of money. For example, if the inflation rate is 5%, an item that costs ₹ 100 today will cost ₹ 105 a year later. This means that if the growth rate of your investment is not equal to or more than the inflation rate, your real return may be negative.

Today, we will tell you some ways through which you can save your hard-earned money and savings.

Fixed Deposit (FD)
FD is a safe option, but its interest rates hardly keep up with inflation. If the FD interest rate is 6% and inflation is 5%, the actual profit will be only 1%.

Stock Market
The stock market can give better returns than inflation in the long run. But it is risky and volatile. Investors need to have long-term planning and patience.

Real estate
property prices and rents usually rise with inflation. However, there are higher transaction costs and maintenance expenses.

Gold
Gold is considered a safe investment during inflation. However, it does not generate income and its price depends on many factors.

Bonds
Government bonds are safe, but their fixed interest rates can be vulnerable to inflation.

Inflation protection strategy

Diversification –
A balance of investments across stocks, bonds, real estate, and commodities – balances risk and returns.

Long term investments
in stocks and real estate have the potential to yield high returns. Review and improve your portfolio from time to time.

Expert opinion
Adhil Shetty, CEO,of  BankBazaar.com, says, "Inflation affects the purchasing power of your money. Investments should be such that they can at least outpace inflation."