(06/23/2010) Today the Fed announced its continued dedication to keeping its key lending rate at its current historically low level.  This rate has remained between 0 and 0.25% since December 2008.  So what does this mean for consumers and their finances?

According to MSNBC, the Fed’s decision “means rates on certain credit cards, home equity loans, and some adjustable-rate mortgages and other consumer loans will remain low.”  On products like these where rates may fluctuate depending on the current market conditions, the easiest way to find the best rates is to look online at rate comparison tables such as those featured on ERATE.com.

This low-rate environment presents a good opportunity for some consumers to consider refinancing their current home loan.  If their current loan has a higher rate attached to it than those that are currently being offered, homeowners could potentially save tens of thousands of dollars over the term of their loan.  Furthermore, refinancing could also save them hundreds of dollars immediately on their monthly payments.

On the other hand, this low rate environment may be deleterious to savers looking for a high yielding savings product.  However, they should look to short term certificates of deposit (CDs) as well as promotional rates to earn the most interest.  Short term CDs allow savers to benefit from the increased APY of a termed saving product, while still allowing them the flexibility to access and adjust their savings during the year.  Promotional rates are also a great way to secure an inflated savings rate in a low-rate environment.  Be sure to be aware of the conditions that must be satisfied to receive the promotional rate.

While it is unclear when rates will bounce back up, the best way to keep a finger on the pulse of various rates is to look at online rate tables.  Checking them regularly will keep consumers informed and educated on what rates are available.

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