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Source: Informa Research Services
(06/17/2010) Interest rates attached to savings accounts may have seen many better days, but that doesn’t mean you should turn a blind eye to them. Between fixed short term certificates of deposit and promotional rates offered by financial institutions, this is the time to pay special attention to your savings accounts.
According to Informa Research Services, the national average on a 6-month CD dropped to 0.63% from 1.12% one year ago (Source: Informa Research Services’ Interest Rate Review). While it seems like rates are constantly moving lower each week, this doesn’t mean you shouldn’t look for an attractive rate on your savings account. On the contrary, this means you should seek a high rate on a short-term CD and lock it in until rates begin to rebound. Using short-term CDs will allow you to benefit from the fixed rate while still allowing your savings to stay flexible. Maintaining flexibility is important so that you can take advantage of higher rates once they are offered.
In addition to short-term CDs, another way to earn interest in a low-rate environment is to look for financial institutions offering promotional rates to draw in new customers. While these rates may only be temporary, they can still be a good place to put your money until you find a product offering a higher yield.
Just because rates are currently low doesn’t mean you should give up on earning a little interest on your savings. Remember that the best interest rate currently available will always be better than earning nothing.
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