Low Bank Rates Hurting Savers
The current low bank rates hurting savers the most is being felt across the country. If you are saving your money on a financial institution at the present rate of interest, you are losing money to inflation, fees, and taxes.
For those Americans either in retirement or approaching retirement, the investment strategy is to be conservative. This is translated to placing your retirement nest eggs in CDs and Treasury bonds. Unfortunately, this is a lose-lose situation with interest rates as low as they are at the present time. Many on fixed incomes have saved for decades just to watch their savings lose money because of the current financial crisis that was caused by the banking industry.
Many elderly have seen their interest on their saving accounts drop to 0.10%. With the current inflation rate for November 2009 at 1.8383%, those earning 0.10% were losing over 1 ½ cents on every dollar they had tucked away. This is $174 on every $10,000 that was saved. After taxes and fees, it won’t take long for the savings to diminish to a level where many on fixed income will be standing in bread lines just to eat.
The forecast for inflation is going to be over 2% at the end of the year or the early part of 2010. Most of the elderly’s savings will be lost.
The choices many are facing is either do what the Federal Reserve wants you to do by taking a big risk at investing in Wall Street or just lose money. This is unfair to keep the interest rates artificially low so the bankers that put America and the world in recession can recover while those that have worked all their lives and saved are punished.
With the current low bank rates hurting savers, it is time for a change and let the bankers to hurt. This should be done by increasing bank rates now.
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