Friday, January 30, 2009

Interest Rates: Dropping like they're hot.

Another couple weeks, another drop in interest rates.  The honeymoon with Dollar Savings Direct is over as they finally caved in and dropped the savings account APY from 4% to 3.5%.  Sadly, this was expected as they had already dropped the rate on their CDs weeks earlier to 3.5%.  Along with the drop in savings, they followed up with another drop in CDs to 3.25%.  So probably only a month or so before more cuts are coming.

DSD had stood out above the rest, but the pack is getting tight at the bottom.  Seems like its the cool thing for all banks to offer basically nothing on savings account.  What infuriates me is seeing ads like Citibank's "Earn More in Less Time with a Citibank 12-Month CD: You can feel confident with a short-term CD at a great rate. All from a bank you can trust."  Really? 2.40% is a great rate? Please don't patronize me.  And a bank you can trust?  Actually... Big Vik hasn't done much to salvage C from the ginormous death spiral its been on.  The government bailout wasn't enough and the rumors of nationalization persist.  So can I really trust you Citibank?  FDIC insurance my friend.  Thats what I trust (even then where is the FDIC getting all this money... something has to give).

Not many options out there.  You can still grab some great rates if you get into the whole High Yield Checking account thing, but that doesn't come without some effort.  They usually require auto-deposits, a # of debit card transactions, etc.  Is the hassle worth the rate?  Yes if you usually use your debit and are set up to auto-deposit in that bank already.  Since my banks don't offer that and I never use a debit card, I'll just grin and bear the low rates for now.  When I get desperate I might just have to take the plunge though... 5.01% at Provident.  So tempting....!  Good luck out there :) 

What an up-beat post.  Sorry!

BTW, my netbook rocks my socks.

One Love,

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