Data analysis: FLAT purchasing power vs savings accounts over time

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Data analysis: FLAT purchasing power vs savings accounts over time

This analysis compares the purchasing power preservation of $10,000 across various financial instruments over 1, 3, 5, and 10-year horizons. We'll examine a standard US savings account, a high-yield savings account, USDC, and FLAT, accounting for inflation using historical CPI data.

Methodology

To provide a clear, data-driven comparison, we'll use the following assumptions and data points:

Initial Investment: $10,000 for all options.
Inflation: Based on historical Consumer Price Index (CPI) data from BLS.gov. The CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. For future projections, we'll use the average annual CPI over the last 10 years as a conservative estimate.
US Savings Account: The current national average APY for a US savings account is 0.39%.
High-Yield Savings Account (HYSA): Current best rates for HYSAs range from 3.80% to 5.00% APY. We will use a competitive rate of 4.15% APY for this analysis.
USDC: While some platforms offer rewards for holding USDC, it is primarily designed to be pegged 1:1 to the US dollar and does not offer real growth that outpaces inflation on its own. We will use a 0% real growth rate for USDC, acknowledging that any yield earned would need to be considered separately and can vary significantly (e.g., Coinbase offers 3.50% for Coinbase One members, Kraken offers up to 1.75%, and other DeFi platforms can offer higher but more volatile rates). For simplicity in comparing purchasing power preservation against inflation, we assume 0% real growth for the base USDC asset.
FLAT Protocol: FLAT is designed to track the Consumer Price Index (CPI), aiming to preserve purchasing power by adjusting its value in line with inflation.

Historical CPI Data (Annual Average)

To project future purchasing power, we first need historical CPI data. The Bureau of Labor Statistics (BLS) provides comprehensive CPI data.

Let's assume the following average annual CPI for our projections:

Last 1 year (July 2025 - June 2026): According to the BLS, the CPI for All Urban Consumers (CPI-U) rose 3.5% over the 12 months ending June 2026.
Last 3 years (July 2023 - June 2026):
Last 5 years (July 2021 - June 2026):
Last 10 years (July 2016 - June 2026):

For the purpose of this analysis, we will use a hypothetical average annual inflation rate of 3.0% for future projections across all horizons (1, 3, 5, and 10 years). This is a simplified approach, as actual CPI fluctuates significantly.

Calculations

We will calculate the real purchasing power of the initial $10,000 after inflation for each option.

Formula for Future Value after Interest:
$FV = PV * (1 + r)^n$
Where:

$FV$ = Future Value
$PV$ = Present Value ($10,000)
$r$ = Annual Interest Rate (APY)
$n$ = Number of Years

Formula for Real Purchasing Power (adjusted for inflation):
$Real Purchasing Power = FV / (1 + \text{inflation rate})^n$

Initial Investment: $10,000
Assumed Annual Inflation Rate for Projections: 3.0%

1-Year Horizon

Option	Annual APY	Future Value after Interest	Real Purchasing Power (after 3.0% inflation)
US Savings Account	0.39%	$10,039.00	$9,746.60
High-Yield Savings	4.15%	$10,415.00	$10,111.65
USDC	0.00%	$10,000.00	$9,708.74
FLAT (tracks CPI)	3.00%	$10,300.00	$10,000.00