For another, it doesn’t decrease in value. And although the dollar is no longer pegged to a physical asset, such as gold, it’s backed by the full faith and credit of the U.S. government. That means your $5 bill is going to be worth $5 for as long as you own it.
But there’s a reason you don’t just keep bills in a safe: inflation, which gradually erodes the spending power of your dollar. That’s why it’s generally advisable to park your cash in a vehicle that maintains liquidity and safety, but also gives you a chance to keep up with inflation.
At today’s rates, you may actually be able to do better than that.
“The yields are definitely more attractive and rewarding than they’ve been in a long time,” Arnott says. “You’re actually staying ahead of inflation as long as inflation continues to moderate.”