Saving Interest Rate Is Not Low Enough

I’m sure that’s what all the banks think. “If only we can somehow make it 0% interest and still get people to deposite their money…”

This post is provoked as I am doing my monthly accounting and noticed this in my ING Direct Saving account.

So 1.5% is not low enough and they make it 1.4%, whaaaa….

They are really being unhelpful for those of us who are saving their money.

There are those people who think, “I will lose my money if I put them in stock market. I will not make any interest if I put them in saving. I will also lose money to inflation if I put them under my mattress. To hell with it, I’m going to spend it all.”

For sure that is not the right mentality to have, respective to saving and being frugal, but surely, we can all see why people feel that way, no?

PS. Hope everyone had a good July 4th weekend.

Originally posted 2009-07-05 16:01:24. Republished by Blog Post Promoter

3 Responses

  1. I did think about that :) But it’s nice having a nest egg, even if it isn’t earning a ton of interest. I’d rather have the liquid cash just in case of an emergency rather than hunting for the highest interest rate.

  2. rob says:

    Yes, it’s very disappointing. I’m longing for the days when the interest rate was as high as 4 – 5%! At least it beats the near zero interest rates in Japan banks.

  3. Meg says:

    As a banker, I have to point out that we do not generally make any more money off deposits or loans when interest rates move – we adjust the rates based on our cost of funds (which is controlled by a variety of factors outside of us, like Fed policy, inflation rates, the cost of FDIC insurance, etc).

    Banks that want to stay in business make a point of being “interest rate neutral.” That means we hedge our bets and whether loan rates and deposit rates go up or down, our spread remains the same.

    In fact right now, our spreads are so thin that we are actually LOSING money on almost all interest bearing deposits and on many loans (like those set up to float with the Prime rate, which we never projected to be so low as it is now).

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