For many months consumers have heard that this is the “home buying market” of the century. This factor is partly influenced by the historically low interest rates that the Federal Reserve has kept at bay for the greater portion of the year. That of course is great news for those who are in the market for borrowing money as they will be able to borrow money more cheaply. However, investors looking for high interest bearing savings account rates are struggling to increase the rate of return.
Last week more then 10 banks including Citibank, HSBC and Union Federal Saving lowered the interest rates on many of their savings accounts. Since the banking industry is currently not in the position to raise the interest rates, consumers wanting to increase both their savings and rate of return on their accounts need to save more money.
Before this economic bust, those looking for “high yielding savings account rates” need simply enter those words into their favorite web browser. Dozens of options with interest rates ranging from 4% to 5%+ were standard. However, now, getting a 2% rate of return is considered to be a decent savings rate. The only way to actually counterbalance this trend and earn a great rate of return is by consumers saving even more cash in order to fill the interest void.
The equation is not glamorous, but it is true. Individuals need to spend less money than they are currently earning and save that money in a bank account. While the investors are working twice as hard and saving every spare penny, they also need to keep their eyes open for current savings interest rate news. Right now the overall strategy is biding time until the market turns, and it eventually will. Until then, only by increasing the rate of your savings, can your investment earn a great savings rate.