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Investing 201

Why savings interest rates won't budge

Friday, September 13, 2013 - 02:09

The yield on the 10-year U.S. Treasury note is near 3 percent and this might tempt you to pull out of stocks and bonds and put your money into a CD or money market account. But here's what you need to know before you make that move.

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Interest rates are rising fast. And with the uncertainty ruling over Syria he may be tempted to profit on stocks or bonds and -- that intimacy. Or money market account but wait. You may not get the yield you expect. -- yield on the benchmark ten year treasury has nearly doubled from one point 6% on May want. Just shy of 3% today. Interest rates on one in five years CDs and money market accounts have been flat. Rates for the one your money market actually inched down the reasons. One CDs and money market accounts tracts of federal funds rate which is near 0%. Not the ten year treasury which affects mortgages. Too there's the banking factor. They're not having trouble attracting deposits I mean there's still plenty of people looking for a safe place with their money. They're sitting on seven trillion dollars worth of deposits and savings accounts alone banks have a lot of cash on hand. And they don't really have a needs to pays. He's investors more money to attract more deposits. So where should investors parked their five. Dollar -- step up CD these accounts feature rates that rise along with interest rates at set intervals. That white investors can fight inflation and not be tied a bit longer term commitments also consider iboxx. These savings bonds are indexed to inflation and their government insures them. Finally consider trading your old CD for a new one at a better rate some banks. -- as little as as three months interest. An early withdrawal penalties so. You know that's not going to be a big hits a -- if you can really increased interest -- honesty budget point of money out and getting you know. And consider this how bad -- penalty. When a five year old Eagles out. Three quarters of a percent.

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Why savings interest rates won't budge

Friday, September 13, 2013 - 02:09

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