When will Savings Accounts Go Up?
It's been a decade since we have had decent interest rates for savers. Now that the feds have another rate hike, why don't savings accounts ever go up? According to this Washington Post article:
The Federal Reserve raised its benchmark interest rate by 0.25 percentage points on Wednesday — the third such rate increase since the end of the financial crisis.
You’ve probably noticed that the rate increases have made borrowing more expensive by bumping up the rates charged by credit cards, home equity lines of credit and other loans. But it may be a while before the increases boost your savings account. Banks get to choose when to raise the interest they pay on saving accounts, and they’re in no rush to show you the money....
But after the financial crisis, which made many consumers more nervous about investing or spending money, many financial institutions are already so flush with cash that they don’t have much of a motivation to bump up the yields on savings accounts, says Sean McQuay, a credit and banking expert with the personal finance website NerdWallet. Although some firms have started to pass those higher rates on to savers, the Fed may have to raise rates a few more times before better yields on savings accounts become the norm, McQuay says.
The article says for savers to shop around for good rates--up to 1% at some places. Seriously, this is a good rate? It's pathetic. Retirees and other savers suffer and for the past eight years, we have heard crickets. But with Trump in office, that will probably change. Still, the point is that these rates are just sad and savers have been losing for the past decade. Those who save, make money and do the right thing are the ones who seem to come up short in this economy. Of course, with the new Trump budget, maybe this will change. One can only hope.