Interest Rates In The USA

[pdogg]

For years I've had online savings accounts with ING Direct (now Capital One 360) and HSBC.  Interest rates were similar and with a click of the mouse I could transfer money to/from accounts in other banks.

 

Now interest rates in Thailand are higher than in the USA but not FDIC insured,

 

Got an email from HSBC saying they were lowering their rate to 0.10% or just about nothing.

 

So I'm shifting that money to Capital 360 (formerly ING Direct) where the rate is 0.75% which is quite good for a USA Bank in 2013.

 

Been with them for about 8 years now and am quite happy.  If you like the 0.75% interest rate click here for more info.  (For US guys only, you'll need a Social Security number to open an account). 

 

https://www.capitalo...save=PrsrMn3USh

[JaiDee]

yeah, it's pretty ridiculous here, PD....hardly worth keeping your money in any bank, that's for sure.

 

I remember when I opened a Bank of America account last summer because my credit union has a lot of restrictions, and they don't, as far as certain international wire transfers, etc......while opening the account the young man who was helping me told me that their interest rate was .50%;  "but if you maintain a balance of at least 50,000 dollars that goes up to .75%!"

 

        First thought;  who the hell keeps 50 large, minimum,  in a checking account?  2nd thought; even the most amateurish investor ever could get more than a percentage point on 50K, so who the hell is taking this 'deal'?

 

    I remember walking around Sheffield in the U.K. a few years ago with some local friends there, seeing all the competitive signs in the bank windows offering 5, 6, even 6.5% returns on savings and checking [chequing!] accounts.....my buddies told me " you should have seen it a few years back, it was closer to 8%."  No idea what they are now over there, but they have GOT to be better than here.

[TEXASMAC]

pdogg is it insured? I have been a boring Bank of America for years and I need a better place to put my money. Someplace I can access if I decide to depart USA.

[ArchieBunker]

yeah, it's pretty ridiculous here, PD....hardly worth keeping your money in any bank, that's for sure.

 

I remember when I opened a Bank of America account last summer because my credit union has a lot of restrictions, and they don't, as far as certain international wire transfers, etc......while opening the account the young man who was helping me told me that their interest rate was .50%;  "but if you maintain a balance of at least 50,000 dollars that goes up to .75%!"

 

        First thought;  who the hell keeps 50 large, minimum,  in a checking account?  2nd thought; even the most amateurish investor ever could get more than a percentage point on 50K, so who the hell is taking this 'deal'?

 

    I remember walking around Sheffield in the U.K. a few years ago with some local friends there, seeing all the competitive signs in the bank windows offering 5, 6, even 6.5% returns on savings and checking [chequing!] accounts.....my buddies told me " you should have seen it a few years back, it was closer to 8%."  No idea what they are now over there, but they have GOT to be better than here.

You might be surprised JD.  There are a lot of old farts that do.  These arent Depression Kids but more like KIDS of Depression kids.  I know a couple of older folks who have done well in thier lives and inherited some rather valuable property that was sold about 6-7 years ago.  It was in California and the market was quite high.  Now I know one of these geezers is VERY conservative and has it stuffed in matresses.  I have no control over this person and am not comfortable talking about money/investments with them.  Now the other old fart is a different story as it is someone very close to me.  I have been working on this person for years and they are VERY risk averse and have really little or no uinderstanding of investing.  They also tend to be very negative in nature when it comes to this sort of thing. 

 

The bottom line is I have beena bit successfull about getting this person to invest some of it the past 5 or so years.  They have reaped some benefits.  But to tell you this person has a LARGE amount of cash in these almost zero yield accounts.  I have talked til I was blue in the face YEARS AGO, before it became quite fashionable, of buying solid dividend bearing stock.  No dice they said what if I lost all the money.  I was talking YEARS ago about putting in 6 figures into things like this: Coke, McDonalds, Altria, Exxon Mobil, Con Ed etc..  I had a list of about 20 from which to pick.  Yeah these companies are going out of business overnight-NOT!!!!!  you have some money and those quarterly dividend payments come around before you nkow AND they add up. I tired but I have basically given up so this person has, like I said, well over 6 figures in these loser type accounts.

 

BTW I remember the Jimmy Carter days when these accounts were over 10% as interest rates were SKY HIGH!!!

[deepthroat]

The only problem in comparing today's interest rates with those of years ago, when interest rates for savings accounts were 5% above, is that everything is relative. When interest rates were higher, inflation usually ate up a lot of the gain. So ultimately, the growth in real dollars as result of the interest on a savings account was negligible. Today, with inflation at very low levels, interest rates are again giving a negligible real dollar growth.

[pdogg]

pdogg is it insured? I have been a boring Bank of America for years and I need a better place to put my money. Someplace I can access if I decide to depart USA.

 

Yes.

 

https://www.capitalone360.com/referafriend/index.asp?save=PrsrMn3USh

 

 

Watch Your Savings Grow.

Earn a variable 0.75% Annual Percentage Yield (effective10/10/2012). Open 360 Savings account today.

The 360 Savings Account

• High Interest, No Fees, No Minimums - All your money goes to work for you.
• No Changing Banks - It electronically links to your current checking account. Transfers are free and easy.
• FDIC Insured - Your deposits are FDIC–insured up to $250,000 per depositor.
• Quick Application - Start saving in less than 5 minutes. Giddyup.

https://www.capitalone360.com/referafriend/index.asp?save=PrsrMn3USh

[ArchieBunker]

The only problem in comparing today's interest rates with those of years ago, when interest rates for savings accounts were 5% above, is that everything is relative. When interest rates were higher, inflation usually ate up a lot of the gain. So ultimately, the growth in real dollars as result of the interest on a savings account was negligible. Today, with inflation at very low levels, interest rates are again giving a negligible real dollar growth.

 

 

I really do not believe that the inflation rate is as low as the govt says it is.  Just look at the things we normally buy and how much things have increased over the last 5 years.  I am just thinking off the top of my head how much we are apying for fuel and lots of different food stuffs.....

[pacman]

The banks are holding so much bad debt that they will only pay depositors the least amount they can get away with.

 

Inflation numbers are fudged as usual. shadowstats.com give an estimate of the true inflation picture. Here's their chart for the past 32 years -

 

 

The government only releases numbers that are expedient. They don't want to spook the public more with the true picture. Finding out what is really happening isn't hard, sites like shadowstats do a good job stripping away the nonsense.

[pdogg]

For short term trend analysis it is often useful to use CPI or PPI data excluding food and energy since food and energy cost varies considerably from month to month while other products generally do not.  Overuse of "excluding food and energy" data will underestimate inflation in the long run.

 

But there are certain consumer segments with massive deflation, look at laptops, and what the exact same laptop you have today would have cost 10 years ago, if it was available.

[pdogg]

 Con Ed etc..  I had a list of about 20 from which to pick.  Yeah these companies are going out of business overnight-NOT!!!!!  you have some money and those quarterly dividend payments come around before you nkow AND they add up. I tired but I have basically given up so this person has, like I said, well over 6 figures in these loser type accounts.

 

BTW I remember the Jimmy Carter days when these accounts were over 10% as interest rates were SKY HIGH!!!

 

I'm quite familiar with Con Ed and Con Ed stock which has the unfortunate ticker symbol ED which might be better suited for Pfizer. 

 

If interest rates remain low these are great stocks.  But at the first hint that interest rates are rising these stocks should be sold. 

 

The Con Ed dividend has increased every year for a long time, ever since the NYC fiscal crisis in the 70's.  However, if interest rates were over 10%, Con Ed s stock price would have to drop considerably to match that yield.

[Tomcat]

The quote function is screwed up here but to answer Jaidees question about rates in UK.. its around the same as US. Also Inflation is around 3% in UK so its pretty bad. A few years back the Icelandic banks were offering 8% but they all gone bust along with Iceland.

 

If it looks to good to be be true...it usually is to good to be true

[Mod1]

The quote function is screwed up here 

It's working for me.  Are others having problems?

[SiamSam]

It's working for me.  Are others having problems?

 

Works for me also.

[CheekyCharlie]

Greeks & Gifts.............. Except their not Greek. Their bust too......