Where Savers Could Gain More by Choosing Smart Saving Over Cash

Where Savers Could Gain More by Choosing Smart Saving Over Cash

Holding cash instead of depositing or investing it is a losing strategy, especially in Greece and Spain, where it costs people thousands, according to an August 2026 study. This freshly released report by British Business Funding reveals the top 10 countries where inflation has been eating through cash savings. 

• Greeks who kept €10K in cash lost €1.4K to inflation over five years. The same amount in deposits and local stocks would have grown to €17K.
• At 25% inflation over five years, Austria is one of the last places in Europe where keeping money in cash makes sense.
• Cash savers in the US and UK lost up to 19% to inflation while those who invested grew their money by over 22%.

The research examined developed economies to find where holding cash costs people the most compared to a smarter alternative. For each country, the study tracked how much inflation rose over five years and measured what 10K in local currency was actually worth after that period if kept entirely in cash. It then compared that against a split strategy: 5K placed in a bank deposit earning the average annual deposit rate, and 5K invested in the country’s main stock index with dividends reinvested. By combining both halves, the report calculated the cost of holding cash over depositing and investing.

Here’s a look at the 10 countries where keeping money in a savings account cost people the most:

You can access the complete research findings here.

1. Greece

• 5-year inflation: 16%
• Average deposit rate: 1.2% annually
• 5-year stock return (ATHEX, dividends reinvested): 23.5%
• Cost of playing it safe with a €10K deposit: €8,338

Greeks are losing thousands by keeping money in cash instead of depositing or investing it. Inflation rose 16% over five years, so €10K sitting at home shrank to just €8,621 in real purchasing power. The alternative looked very different: €5K in a bank deposit grew at 1.2% annually, while the other €5K put into the Greek stock market returned 23.5%, bringing that half to over €14K. Together, that adds up to €8.3K that cash savers missed out on. 

2. Spain

Spain is another country where holding onto cash makes little financial sense. Inflation climbed 18% over five years, leaving €10K in cash worth just €8,475 in real terms. The Spanish stock market, tracked by the IBEX 35, returned 20.5% over the same period, turning a €5K investment into nearly €12.7K. The deposit half, earning 1.93% annually, could bring the smart-saving portfolio to €15.4K, nearly €7K more than those who kept everything in cash.

3. Italy

Italy ranks third with a similar financial situation to Spain. Prices here also climbed 18% over five years, cutting the real value of €10K down to €8.5K. Meanwhile, Italian banks paid a 2.2% interest rate, even more than Greece. The local stock market, the FTSE MIB, also grew 19.1% over the period, and when both halves are added together, the smart-saving returns come to €14.9K, leaving cash holders €6.4K worse off.

4. Austria

Austria has one of the highest inflation rates in Europe, with prices rising 25% over the past five years. That left €10K in cash worth just €8K in real terms. The smart-saving approach worked out significantly better. Banks paid 2% annually on deposits, and the ATX stock index returned 17% over the same period. Together, those two halves could become €13.2K after inflation, putting smart savers €5.2K ahead of those who held cash.

5. The UK

The UK is another country where keeping cash is a losing strategy. British savers had access to some of the better deposit rates compared to the rest of Europe at 4.2% annually, and the FTSE All-Share delivered 12.6% on the invested half over five years. Together, those two halves reached £12.2K in real terms. The cash alternative offered none of that, with 19.4% inflation cutting £10K down to just £8K, a difference of £4.2K.

A financial expert from British Business Funding shares more insights: 

“Holding cash feels safe, but it isn’t. Every year prices go up, and the money sitting at home buys a little less than it did before. Splitting it between a deposit and the market is one of the simplest ways to fight that. Stocks grow money faster over time, but they drop too, and not everyone is comfortable with that risk. ETFs are a popular middle ground. They spread money across hundreds of companies at once, so one bad stock doesn’t hurt the whole pot. Bonds are another option, offering a fixed return over a set period with less volatility than stocks. Everyone’s situation is different, though. None of this is financial advice, and it’s always worth doing your own research before moving money around.”