Log In
Register
Home
Topic RSS
Facebook
Twitter
Email this5:13 am
Deja-Vu of the early 90's for savings rates?
Anyone remember the .25% savings rates of the early 90's? Seems we are getting there quite quickly today with rates doing down .25 - .50% each month.
Now we are wondering if we should switch from one back to another because they offer a tiny .20% more! That's just $2 on a $1000. Unless you have a bucket loads of cash, is it really "worth it?"
Now with the BoC lowering prime by 75 pips, we all know the savings rates will follow suit by .25-.50% down.
Are we looking at .25% "High-Interest" savings accounts next year? The banks are happy as they are getting free bailout cash, so they don't really need to raise funds from savers. When this depression is over, they will again be making Billions in profit each month.
Can we do anything about it the crashing savings rates?
Mike
7:49 am
I doubt high interest savings interest rates will get that low. If you want an idea of what the banks think will be happening in the future, check out their GIC rates. For example, ING is offering 1.75% on a 270 day GIC, but 2.0% on 1 year GIC. The rates increase steadily beyond the 1 year mark, suggesting that ING believes they will be increasing their rate within the next year or so. What really happens is anyone's guess, but so far nobody has been able to invent an accurate crystal ball.
5:23 am
Here is an interesting point of note. In the UK many senior citizens are "savers"; meaning they live off the interest from their savings. Because the BoE lowered prime to just 0.5%, many of these "savers" are up in arms as their income from the Highrate Savings accounts (some were up to 10%!) have been chopped down to 2.25% now!
The UK government is wanting to INCREASE savings rates now...
I wonder if that will happen in Canada... we all know you can't have historicly low prime rates forever.
Mike
Please write your comments in the forum.