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When it comes to savings, It's rare to see interest rates above 1% nowadays. When were interest rates actually high enough to see a real return on your savings?
When it comes to savings, It's rare to see interest rates above 1% nowadays. When were interest rates actually high enough to see a real return on your savings?
They were great before the democrats took over power during Bush's year six. The economy was great before that time. Bush's first six years were strawberries and cream, then the dems took over and the country has sucked every since... I was making $1000 a month on CD interest until then, this year I made $1000 for the whole year of 2013...
from 1967 to 2010 interest rates saw the following: 10 out of the 44 years had negative real returns. the number of years with negative returns is much worse once taxes are figured in.
The worst year was 1979 when the real return was -2.78% and the best year was 1982 when the real return was 9.40%. During the time rates were high inflation was very high. in fact in real terms had inflation stayed high they would have been really bad in real dollar returns.
From 1967 to 2010 the average real return is 1.91% and the median annual real rate of return is 2.17%.
They were great before the democrats took over power during Bush's year six. The economy was great before that time. Bush's first six years were strawberries and cream, then the dems took over and the country has sucked every since... I was making $1000 a month on CD interest until then, this year I made $1000 for the whole year of 2013...
they were never great...... rates mean nothing without looking at what inflation was . average real return was 1.91% over 44 years before even figuring taxes. . is that great to you?
Catching it lucky and locking in cd or bond rates when inflation and rates were higher and having inflation fall is not how you measure rates being good or bad economically.
It is like that lucky sole grabbing 30 year bonds when rates were high and saying today boy aren't rates great.
Last edited by mathjak107; 02-11-2014 at 06:32 PM..
My rainy day savings account money is sitting there earning 0.85%. When I opened the account in Oct 2008, it was paying 3.5%, but quickly slid down to almost nothing. But I can't complain too much, as I've taken advantage of low rates on the other end - paying off all my debt and refinancing my mortgages twice, going from 7.125% to 3.99%, and getting my mortgage on track to be paid off 10 years early. I've benefitted from low rates much more than I've lost in interest payments on my deposits.
My rainy day savings account money is sitting there earning 0.85%. When I opened the account in Oct 2008, it was paying 3.5%, but quickly slid down to almost nothing. But I can't complain too much, as I've taken advantage of low rates on the other end - paying off all my debt and refinancing my mortgages twice, going from 7.125% to 3.99%, and getting my mortgage on track to be paid off 10 years early. I've benefitted from low rates much more than I've lost in interest payments on my deposits.
I remember how we used to make fun of the 5-1/4% passbook savings account when money markets were 8 and 9%.
Little did we know we were still behind after inflation and taxes.
I remember how we used to make fun of the 5-1/4% passbook savings account when money markets were 8 and 9%.
Little did we know we were still behind after inflation and taxes.
Wow.. so basically savings rates were never actually beneficial?
Highter rates and higher inflation usually go hand in hand.
What worked out nice was if you caught the rates at a high point and locked in a nice long cd before inflation and rates came down. Then you were sitting pretty.
But it only turned out ok because rates and inflation came down. If it went up instead or didn' t come down you would have been hurt.
When it comes to savings, It's rare to see interest rates above 1% nowadays. When were interest rates actually high enough to see a real return on your savings?
Almost any time before now. But the bottom line is having cash in a savings account or CD rarely gives you much of a return above the inflation rate, and probably a negative return after you pay taxes on the interest. People love to rave about how high savings rates were back in the 1970s and early 1980s, but they forget to mention inflation was in the double digits, too.
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