This article is strictly about savings accounts. I am talking about money after you have contributed to your Roth IRA, 401k, and any other market activities you may be involved in.
Every month I get an email alert for my bank statements online. I do not even bother looking at them because they hardly pay me any interest on my money. I was thinking we the savers put our money into a savings account to earn currently 1% on our money. I know with the economy the way it is that seems to be the average. The banks take our money for practically free and loan it out for outrageous amounts even in the double-digit percentages.
Why wouldn’t a bank try to make a killing right now in deposits offering 3-5% on savings accounts? This will in turn give them more money to make better strategic loans. Sure their profit might be a little less but at the end of the day. But they may become a stronger bank for not having so many bad loans floating.
If anyone knows of some great CD’s or Savings rates please post a comment so everyone who is trying to save a little can make a little more than 1%.
Posted by Christine on November 5, 2009 at 6:00 pm
I wish that I had a bank offering good rates to share with you – all of ours are terrible. You have a good point though!
Posted by Eric on October 21, 2010 at 4:13 am
Banks borrow money from the Federal Reserve for like .25% why would they foolishly pay more to their depositors?
That’s what the Fed does, it controls how much money is out in the economy. It was established to have control over our economy to prevent a depression.
The current rate is .25% in 2007, it was 4.75%
Banks ARE making a killing right now on loans, but they are losing a lot on bad debts because many are unemployed and can’t pay their debts.
The FDIC, which insures deposits to banks have started requiring banks to make borrowers jump through hoops to get a loan, so businesses can’t borrow money to expand and employ more people like they could a few years ago.
Its a political agenda that is playing out, but it will soon turn around.