Squeeze More From Your Savings, Even With Low Interest Rates

By Margarette Burnette If your bank has lowered rates on your savings account, don’t take it personally. It’s not you, it’s them. Interest rates have dropped across the board, and they’re likely to stay low for a while. Yes, your savings may be earning smaller yields, but with a little […]

By Margarette Burnette

If your bank has lowered rates on your savings account, don’t take it personally. It’s not you, it’s them. Interest rates have dropped across the board, and they’re likely to stay low for a while.

Yes, your savings may be earning smaller yields, but with a little time and attention, there are still ways to eke out growth.

Why Are Rates So Low?

Banks tend to lower or raise interest rates in response to actions from the Federal Reserve. The Fed, in turn, makes decisions based on economic conditions. When the economy needs a boost, moves by the Fed generally cause rates to drop. Why? Interest rate decreases can encourage businesses and people to take out loans, increase spending and stimulate the economy. (Rate increases in a strong economy, on the other hand, can help slow inflation.)

With the ongoing pandemic, the Fed has taken actions to stimulate the economy.

“The Federal Reserve’s latest economic forecast suggests that they will keep interest rates near zero, at least through 2023,” says Daniel Lee, a chartered financial analyst and certified financial planner in San Francisco.

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