savings account interest rates (loans, union, credit card, borrowing) - Economics - City-Data Forum

tonylu · 03-19-2013, 03:40 PM

I have a question about them. I've noticed that they are extremely low. A couple years back when I started I was getting two cents for having an average of $100 in there. Now I have around 500 and I'm not getting a thing. (I have a job and everything but I kind of need a little more.)

Through some research I found that they don't pay interest at insignificant amounts. Currently the rate is .01%. I'd like to know what drives the savings interest rates up and down? Also does rising savings interest correspond to interest from, say, loans or credit cards?

P.S. I wasn't sure where to put this so I just started a new thread on the main page.

I found a thread that talks about this issue. could a moderator close this please? Thank you.

jeremy2788 · 03-20-2013, 03:21 PM

Why Are Savings Account Rates So Low? - The Simple Dollar <-- good article on why rates today are low.

Some places do offer better (not good) rates, usually credit unions, with something called a Kasasa Checking account. You might want to see if any financial institutions around you offer these.

texdav · 03-20-2013, 09:50 PM

Its because bnaks and such can get the moeny at cheaper ratesthan payig you more by FED actions. Its also meant to push you to spend instead and invest in other places.Funny thing is only ten per cent seem to think it worth the risk of investing in equities after they left in the crsis. From wall streeet to main street many prefer losing alittle not to take risk. That is what they mean by risk off.Alos everybody is holding their breate for when they stop QE to see if like after the 70's recession a whole generation leaves the markets without these incetive to invest.

HappyTexan · 03-21-2013, 07:09 AM

The Fed is dumping money into the system to keep rates near zero.
They have to keep the cost of borrowing low because the USG is living on borrowed money.

lenniel · 03-22-2013, 05:20 AM

With only 500 in the bank, your interest earnings are going to be so minimal that you won't even notice.
FWIW though, we keep our cash in ING at .75% interest rate. You can find 1+% if you shop around but you're not going to get the higher rates with a low deposit amount.