Posted on 12/26/2009 3:01:06 AM PST by reaganaut1
Millions of Americans are paying a high price for a safe place to put their money: extremely low interest rates on savings accounts and certificates of deposit.
The elderly and others on fixed incomes have been especially hard hit. Many have seen returns on savings, C.D.’s and government bonds drop to niggling amounts recently, often costing them money once inflation, fees and taxes are considered.
“Open a Savings Plus Account today and get a great rate,” read an advertisement in the Dec. 16 Newsday for Citibank, which was then offering 1.2 percent for an account. (As low as it was, the offer was good only for accounts of $25,000 and up.)
“They’re advertising it in the papers as if they’re actually proud of that,” said Steven Weisman, a title insurance consultant in New York. “It’s a joke.”
The advertised rate for the Savings Plus account has expired, according to the bank’s Web site; as of Friday, the account paid an interest rate of 0.5 percent. The bank’s highest-yield savings account, the Ultimate, was paying 1.01 percent.
The best deal Mr. Weisman has found is 2 percent on a one-year certificate of deposit offered by ING Direct, an online bank that has become a bit of a darling among the fixed-income crowd.
Interest on one- and two-year Treasury notes was just 0.40 percent and 0.89 percent, as of Monday. Bank of America offers 0.35 percent on a standard money market account with $10,000 to $25,000, and Wells Fargo will pay 0.05 percent on a basic savings account.
Indeed, after fees are subtracted, inflation is accounted for and taxes are paid, many investors in C.D.’s, government bonds and savings and money market accounts are losing money.
(Excerpt) Read more at nytimes.com ...
Some of us understand, and have for several years since Greenspan started using super-low interest rates to prop up and begin bailing out the economy. It's cost me thousands over six or eight years. But it's simple, conservative savers are being forced to finance part of the bailout of high risk investors and stupid government policies.
If this were more widely understood, the Tea Party movement would be bigger and people more PO'd, with 100% justification.
Niggling? That's racist!
That’s what I say!
“Bankers - Go to hell! I’ll take my money where it gets treated much better.”
The problem is not bankers. Banks are paying such low interest rates because (1) low demand from scared borrowers means the banks have no way to make a profit if they pay more for your savings, and (2) what little funds the banks do need they can get from the government at close to 0% (so paying more for your savings would screw their shareholders).
The problem is Obama’s government. It should stop lending to banks at such low rates, and it should stop scaring borrowers with its march to Marxism. Sometime after the 2010 elections is probably the earliest we can hope the government will do either of those things (and only then if we work out tails off to get as many Democrats as possible out of office).
As for your resolve to take your “money where it gets treated much better,” I applaud the sentiment, but exactly where will it get treated much better? At Bernie Madoff’s place?
Only if used by a conservative or in a conservative publication. See also: dissent.
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