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In reality, the FOMC is not the only force that drives interest rates up or down. Individual lenders have wide discretion and routinely charge different borrowers different rates based on their credit history and all kinds of other factors.
They also determine what they’re willing to pay for deposits — and although your savings account APY should rise when the FOMC raises its own rate, that doesn’t always happen. You might notice, for example, that last year’s record-low mortgage rates ticked up a little when interest rates rose, but your savings account held fast at whatever sad rate it’s paying you.
That’s because the financial industry is not immune to the laws of supply and demand.
According to Credit Karma, banks are currently so flush with cash that they simply don’t need your deposits badly enough to pay more for them. Therefore, unlike 1980, it’s a banker’s market that allows lenders to charge more for loans when the prime rate rises without increasing the APY they pay on their savings accounts.
So for now, plan for your emergency fund to continue losing money to inflation while you “save” cash in an account that pays you six one-hundredths of a percent more than it would earn if you stuffed it under your mattress.
CFG and CIT have the highest money market rate,you can withdraw anytime .
Just reported consumers pulled another 41 billions worth of credit in july,you figure they charge what 14-16% and pay us PEANUTS
I would not expect more than peanuts any time soon. No more than a few percent. Hopefully - never. Because that would mean inflation is staying persistently high.
If you were around in the late '70's - early '80's, MMF were paying like 13% because of such high and persistent inflation. I had some 2nd deeds of trust paying 19%, and took on a home mortgage at 14% fixed. Very few people at that time would dare to do that.
I would not expect more than peanuts any time soon. No more than a few percent. Hopefully - never. Because that would mean inflation is staying persistently high.
If you were around in the late '70's - early '80's, MMF were paying like 13% because of such high and persistent inflation. I had some 2nd deeds of trust paying 19%, and took on a home mortgage at 14% fixed. Very few people at that time would dare to do that.
in late 70s,we have a muni bond salesman in our building,he has 15% tax free Triple A rated muni bond ,$5K minimum.Unfortunately no one has 5K.
Short term spending I keep at the local bank. Money needed 2-5 years out is kept at online banking that pays better interest rates. Money for long term gets invested. I can move money around in as matter of days so this system works for me.
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