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Old 08-18-2011, 07:08 AM
 
Location: Portland, OR
8,803 posts, read 7,591,565 times
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Why do I want to put my money into a savings account that yields .04%?
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Old 08-18-2011, 07:12 AM
 
Location: Real Texas.
12,604 posts, read 16,696,969 times
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Because stuffing it into a mattress yields 0%?

But seriously, if you want to keep money in a bank, at least keep a free checking account.
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Old 08-18-2011, 07:19 AM
 
11,999 posts, read 17,520,186 times
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Quote:
Originally Posted by VTHokieFan View Post
Why do I want to put my money into a savings account that yields .04%?
They are good for businesses and the economy at large. It makes borrowing and thus expanision easier and cheaper.

The downside is you earn squat on basic savings accounts.
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Old 08-18-2011, 07:20 AM
 
40,168 posts, read 24,404,342 times
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Quote:
Originally Posted by VTHokieFan View Post
Why do I want to put my money into a savings account that yields .04%?
You don't. You want to INVEST your money elsewhere. That's why low interest rates are a good thing. Because it's an incentive to INVESTORS to put their money to work, rather than put it in the time-out box. The problem we currently have is the perception that the options to INVEST are so risky. We are actually making them more risky by trying to hedge our investments.
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Old 08-18-2011, 07:20 AM
 
Location: Vermont
10,314 posts, read 11,244,604 times
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Isn't it like a lot of other things: good for some, bad for others?

If you're a lender (which includes people wanting to put money into a savings account) low interest rates are not good. On the other hand, if you're a borrower, like someone wanting to buy a house, you want to pay as low an interest rate as possible.

Since my first interest rate on the first house I bought was 13% I feel much better about the rate I'm paying now.
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Old 08-18-2011, 07:22 AM
 
Location: Portland, OR
8,803 posts, read 7,591,565 times
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Quote:
Originally Posted by High_Plains_Retired View Post
Because stuffing it into a mattress yields 0%?

But seriously, if you want to keep money in a bank, at least keep a free checking account.
If I'm getting a negative real return on my cash, wouldn't I just want to spend it before the value of my dollar declines?
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Old 08-18-2011, 07:34 AM
 
Location: Londonderry, NH
41,492 posts, read 51,440,745 times
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I have often wondered why a bank was allowed to pay 1% on deposits while charging 30% on credit card debt. Shouldn't this be considered loan shark rates?

I think the system should be regulated to have no inflation or maybe some deflation and have banks pay small savers at least 3% while getting 5% for mortgages and no more than 12% for credit cards. This would leave far more money in the hands of most of the people and consequently be a great economic boost.

I have resented having to put my retirement funds at risk in the Stock Market in order to have some positive return instead of just letting it make a 3% compound return in a savings bank at no risk. I have never wanted to take any risk with my retirement accounts and resent being coerced into doing so. I am not a gambler with the important things like a retirement.
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Old 08-18-2011, 07:37 AM
 
9,856 posts, read 13,440,356 times
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Quote:
Originally Posted by GregW View Post
I have often wondered why a bank was allowed to pay 1% on deposits while charging 30% on credit card debt. Shouldn't this be considered loan shark rates?

I think the system should be regulated to have no inflation or maybe some deflation and have banks pay small savers at least 3% while getting 5% for mortgages and no more than 12% for credit cards. This would leave far more money in the hands of most of the people and consequently be a great economic boost.

I have resented having to put my retirement funds at risk in the Stock Market in order to have some positive return instead of just letting it make a 3% compound return in a savings bank at no risk. I have never wanted to take any risk with my retirement accounts and resent being coerced into doing so. I am not a gambler with the important things like a retirement.
No one is forcing you to use that particular bank. Let's stay away from regulating things simply to prevent the average person from having to actually plan their finances.
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Old 08-18-2011, 07:38 AM
 
24,503 posts, read 35,486,216 times
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The low interest rates has to do with borrowing money. Not saving it.

The reason why credit cards are allowed to be higher is because they are not loans.
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Old 08-18-2011, 07:59 AM
 
32,510 posts, read 26,406,003 times
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Quote:
Originally Posted by GregW View Post
I have often wondered why a bank was allowed to pay 1% on deposits while charging 30% on credit card debt. Shouldn't this be considered loan shark rates?

I think the system should be regulated to have no inflation or maybe some deflation and have banks pay small savers at least 3% while getting 5% for mortgages and no more than 12% for credit cards. This would leave far more money in the hands of most of the people and consequently be a great economic boost.

I have resented having to put my retirement funds at risk in the Stock Market in order to have some positive return instead of just letting it make a 3% compound return in a savings bank at no risk. I have never wanted to take any risk with my retirement accounts and resent being coerced into doing so. I am not a gambler with the important things like a retirement.
credit card rates are much higher because they are basically unsecured lines of credit. if you had the credit limit available, and bought a house on your mastercard, and then you defaulted on that mastercard, the only thing that happens is you lose your credit rating, and not the house because the credit line is unsecured. a bank loan on the other hand has some form of collateral that the bank can attach or repossess in the advent of a loan default.
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