Has anyone given any attention to the huge gap between interest charged and interest paid? An 11% interest rate on credit card debt is now considered low. At the same time, savings accounts that had a yield of only half a percent a couple of years ago have now fallen to 2/10s of a percent. Is it any wonder Americans are saving so little?
Why don't Americans save more? The inflation rate for 2013 was 1.5%. One hundred dollars in savings in 2013, at .02%, earned 2 cents in interest, but by the end of the year the buying power of that $100 had declined by $1.50.
Someone needs to leak this information to the politicians and pundits.
2 comments:
The politicians and pundits know. They have their own $ in other investments and have no concern about the average guy doing business at the local bank. They are more interested in campaign donations from big businesses that are charging the 11%. Just my 2cents. Now worth only 1.8 cents.
Here’s a pretty shocking fact, though: our “local” bank (the old truly local bank having been bought out by a national chain) quotes interest rates on savings, starting at one cent (could anyone even open a savings account with one cent?) to $2,499.99 as .02% but then, as you go up the savings ladder, the rates stays the same, all the way up to an account with a balance of $99,999,999,999.99. Can you believe it? Still only .02% interest! Clearly, banks are discouraging savings accounts and pressuring customers to put money in CDs where they cannot be withdrawn without penalty for whatever period of time the CD is for. If you hold out for penalty-free liquidity, the BOHICA principle applies.
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