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Old 01-18-2009, 08:00 AM
 
Location: NE FL
93 posts, read 343,537 times
Reputation: 35

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The banks have received billions of bailout money and then we the taxpayers who try to save are penalized. You would think the banks would want to encourage our savings, so they could build capital. You encourage savings by having a higher savings rate.

IMO we should be receiving at least 5% on our savings instead of lowering the rates to ridiculous amounts and forcing some to go back into the stock market.
It would seem someone wants the stock market to receive our $$ instead of keeping it safe with good returns.

Go to change.gov to voice your opinion and vote for better savings rates.
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Old 01-18-2009, 08:25 AM
 
Location: Orlando, Florida
43,857 posts, read 45,530,902 times
Reputation: 58647
It makes total sense, but I doubt they will feel any pressure from government who would rather see that money out there generating jobs and revenue than being in a savings hold.

At least at this point many people are still wondering what to DO with their savings. This may be a problem of past memory if the economy keeps declining.
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Old 01-18-2009, 11:09 AM
 
823 posts, read 2,023,341 times
Reputation: 424
Why should they pay us 5% on our savings when they can get money from the government for significantly less? All the bailouts have made money cheap. The banks are in business to make money. They don't do that by paying more than they have to.

There are still deals out there. If you look around for "Rewards CHecking Accounts" you can find 5-6% rates if you meet certain requirements.
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Old 01-18-2009, 08:10 PM
 
710 posts, read 3,019,174 times
Reputation: 1040
No way can you still find 5-6 percent checking accounts! I used to make 5.05 percent, but now rates are 1-2 across the board. No more high yield savings to be found.
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Old 01-18-2009, 09:46 PM
 
823 posts, read 2,023,341 times
Reputation: 424
Way!

Charter Bank Turbo Checking
High Interest Rate Reward Checking (http://www.firstnewengland.org/fnefcu/Checking_Rewards.asp - broken link)

And that's just two.

There are more out there.
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Old 01-18-2009, 11:22 PM
 
28,453 posts, read 73,498,915 times
Reputation: 18485
There is a pretty simple plan in effect. From way back in the dim reaches of my college economics course I recall that basically all economies have a way to measure how efficiently money changes hands. The economists have equations to describe the Velocity of money - Wikipedia, the free encyclopedia , but the important thing is that the closer to a "risk" venture the money comes the FASTER it pours through the system. If you take your cash to a normal bank they may loan out SOME tiny portion of it to slightly risky thing, like a company with a short history of operation, but MOST of it is going to very low risk things(like government securities and high quality mortgages). In contrast if you take that money and plunk it into a stock fund a whole lot more is going to happen to encourage firms to try and get something happening. THIS is what the authorities WANT to happen -- the only way to put the "humpty dumpty" of Wall Street (and ultimately the REAL firms that rely on stock to finance everything from airplane building to car making to discount retailing) back together is to get money back into the markets.

The Gov't is perfectly happy putting cash reserves into banks so that they don't go kerput, but the banks are too busy fretting over their still nearly impossible to value MBS to get into the "venture expansion" side of lending. That (or high inflation) are the only ways that banks could pay high interest rates on GUARANTEED accounts ( and I don't think anyone really wants banks to get back into the funny business of offering non-guaranteed options as they did in the Keating era...).

The purpose of the "high interest checking" is a bit sinister -- the banks want to FOOL depositors into leaving far more cash in a truly liquid state than sanity suggests is prudent. This is a sign that banks have a negative outlook for their own ability to meet capital requirements as set by the Federal Reserve and FDIC. In fact they are so fearful that people will try to get every last dime "earning something" in CDs (that the banks basically have no choice but to put only in government backed securities given the volatility of real estate and pretty much anything else) that they are willing to grossly overpay a hyper careful number of individual clients to potentially open / maintain demand accounts YET are unwilling to treat these customers to more than a paltry $1250 return. The caps at $25,000 mean that no one customer will really see this sort of account 'grow' to any significant extent, and it is very likely that transaction fees / errors will cause very few folks to even be paid this amount. The owners of such banks cynically look at what happened to a bank like Indy Mac where a pretty stupid Senator basically caused a collapse by eroding confidence and say "what can we do make customers keep more of their day-to-day money here?" , and the answer comes back "act like we are wlling to over pay LOTS of people a LITTLE bit" -- California mulls probing senator over IndyMac crash | Politics | Reuters

Personally such actions turn me off -- I like honest banks. If a bank tells me "look, checking accounts are money losers for us, but we'll do everything we can to put ATMs where they are convenient for our customers" I can respect that. I have no such feeling for banks that try and con me into thinking that there is some "magic path" to high returns. Debit cards are a menance -- all the convenience of a credit card with none of the protection! Debit cards fuel overdraft outrages - The Red Tape Chronicles - MSNBC.com (http://redtape.msnbc.com/2007/01/debit_cards_fue.html - broken link)

Last edited by chet everett; 01-19-2009 at 12:22 AM..
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Old 01-19-2009, 12:14 AM
 
710 posts, read 3,019,174 times
Reputation: 1040
Quote:
Originally Posted by PeteyNice View Post
Way!

Charter Bank Turbo Checking
High Interest Rate Reward Checking (http://www.firstnewengland.org/fnefcu/Checking_Rewards.asp - broken link)

And that's just two.

There are more out there.
Way!

Lol. Thanks, looking for new places to park my USA/Zimbabwe money now!
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Old 01-19-2009, 10:53 AM
 
Location: NE FL
93 posts, read 343,537 times
Reputation: 35
Actually, I'm mostly talking about IRA CD's. Sorry. I keep enough in our checking to pay bills plus some cushion.

About 2 yrs ago we were able to get 5% on a small CD and it's gone down ever since, definitely need to check around. If I have 100k+ to put in the bank it would be nice to get a decent interest rate. At least they are compounding it daily and paying quarterly. With so many getting out of Wall St, I would think folks need to put their money somewhere for safety and the most interest they can get. It certainly makes it difficult to calculate retirement shortfalls if they keep changing the interest rates on us. That's one reason so many got into Wall St is due to the higher returns than savings/CD's. Luckily we rolled a 401-k earlier this year and got out of the market. Lost 75% in the dot com bubble, just got it all back and wasn't about to repeat those losses.
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