# Bank Interest Rates Going Up



## Chet (Sep 7, 2022)

I got my statements yesterday and the interest rate on savings went from a whopping 0.05% to 0.16%. The Fed raised rates and I wondered if the banks would follow suit or pocket it as a windfall. It's not much but it helps. 

On a related note, the property tax rebate program for seniors in PA got some help from the covid relief money from Washington, so I'll be getting a 70% increase in what I normally would have gotten.


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## mathjak107 (Sep 8, 2022)

Banks are so flush with money to loan they don’t need deposits and so will pay little for your money


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## rgp (Sep 9, 2022)

mathjak107 said:


> Banks are so flush with money to loan they don’t need deposits and so will pay little for your money



 Just heard on the news that banks are once again offering zero down home mortgages . IMO never a good thing. Offering more debt to those that can least afford it. But what the heck , they're playing with our money ... so what do they care ?

Instead of awarding those of us that tend to save/invest , [by just a tad higher return] ... no they offer it [by way of credit] to those that cannot hang on to a nickel . Many of which soon become 'upside-down' in their debt , then just go under , and walk away from it altogether.

 I personally know two people that have done this/this happened too ..... and they see nothing wrong with it.


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## Bretrick (Sep 9, 2022)

The previous rate rise from the Federal Bank here in Australia raised the rate by .5%. My bank passed on .15% to savings account holders.
The banks are very selfish.


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## HarryHawk (Sep 9, 2022)

I previously shared your frustration.  I recently started to buy t-bills with the money I had sitting in the bank.  T-bills can be easily bought with the money from your bank account and can mature in as little as 4 weeks.  When they mature, the money is automatically re-deposited in your bank account or can automatically purchase a new t-bill, your call.   It's an easy process that takes less than 5 minutes and can be done from home.  

The t-bills are safer than money in your bank.  They are currently paying between mid 2% to mid 3% based on the maturity duration.  They may not make you rich, but it beats the fraction of a percent that the banks are paying for the use of your money.


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## Brookswood (Sep 21, 2022)

Chet said:


> I got my statements yesterday and the interest rate on savings went from a whopping 0.05% to 0.16%. The Fed raised rates and I wondered if the banks would follow suit or pocket it as a windfall. It's not much but it helps.
> 
> .


I strongly suggest you try a so-called Internet bank.  They are paying at least 2% these days.  

Also, consider CD's.  I just setup a CD ladder with an investment firm. (There are several that don't require a lot of $$'s to start.)  In about an hour I bought CD's that range from 2.9 to 4.1 percent.  They are staggered to come due every three months. As rates go up I will renew them at the higher rates.   If rates flatten or start to fall, I will extend the maturity out farther.

And get some I-bonds.  They are estimated to pay about 7% this year even if inflation falls a few points from what it is today.  They will keep you about even with inflation, until you pay your income tax. They you are behind again. But, not as far behind as having money in the bank earning 0.5%.  <--- That rate is pathetic.


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## Bretrick (Sep 21, 2022)

After another round of rate rises by the Reserve Bank of Australia my savings account interest rate has risen to 1.5%


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## Don M. (Sep 21, 2022)

Our Money Market account is currently sitting at 1.25%.  Today's Fed hike should boost that account nicely.  With even more Fed hikes expected, the rates should continue to climb.  I may put some of our funds in CD's....the 2 year CD is currently paying 3.4%.  However, given the volatility in recent months, I'm not in any big hurry.


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## JustDave (Sep 22, 2022)

The Fed doesn't want to cause a recession by raising rates, but I'm thinking we need a recession.  I don't consider myself to be an economist, but I don't think it's possible to live in a permanent economic bubble of bliss.  Those bubbles are heady affairs that always end in disaster.


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## mathjak107 (Sep 22, 2022)

I think the fed may get one more increase before having to reverse to keep us from becoming a Japan .

most of our worker shortage , wage and materials issues are not solved by rates


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## JustDave (Sep 22, 2022)

mathjak107 said:


> most of our worker shortage , wage and materials issues are not solved by rates


Yes, this is a problem this time around.  I don't think we ever experienced the likes of this before in my lifetime.  I don't know how we can handle worker shortage and supply chains, and the Fed isn't equipped to fix that.  That is probably caused by the pandemic, which is also something we never lived through before.


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## bingo (Sep 22, 2022)

the bond market  is  selling off...not good..raise  interest  rate...increases inflation....
they are  going to crash this market


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## Don M. (Sep 22, 2022)

Most "experts" are predicting a recession in 2023...I suspect they are right.  This economy is due for a good "correction", and that may be the only way to stop this ridiculous inflation.


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## Been There (Sep 22, 2022)

I told the men in my Wednesday night poker game that I thought the recession would start to dig in sometime during the first quarter of 2023. About a month after Powell was named to head the Fed, he gave a speech to anyone in government in Washington that wanted to hear his thinking about the Fed’s position in the next year. He frothed at the mouth to get the Chairman’s job. In 2018, the main part of his speech was how well the economy was rolling, but it will need to be watched closely, so it didn’t roll out of control. I liked Greenspan. He was the first Chairman back when I started watching the economy and trading.


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## HarryHawk (Sep 22, 2022)

It seems to me that at least a major contributing factor to inflation has been unbridled government spending.  The government continues to spend.  Seems like every day a few more billion here, ten more billion there and then every couple of weeks a major bill or edict spending 100's of billion.

It has been easy and convenient to ignore the national debt when the interest rates were near zero.  They have now increased by at least an order of magnitude.  More and more money is going to be required to service the debt.

It's tough to fill the hole when you continue to dig.

I think we are going to see things that are unlike anything we have witnessed previously.


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## mathjak107 (Sep 23, 2022)

bingo said:


> the bond market  is  selling off...not good..raise  interest  rate...increases inflation....
> they are  going to crash this market


Pssssst , it already crashed


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## Don M. (Sep 23, 2022)

HarryHawk said:


> It seems to me that at least a major contributing factor to inflation has been unbridled government spending.  The government continues to spend.  Seems like every day a few more billion here, ten more billion there and then every couple of weeks a major bill or edict spending 100's of billion.


Very true.  Government spending, without proper funding, is little different than individuals running up more debt than they can handle.  Ultimately, it winds up in bankruptcy.  With these rising Fed Fund rates, more and more of the government budget will be going to pay the interest on our ridiculous National Debt.  This will likely lead to Congress spending even more money and making things worse.  

If some fiscal responsibility isn't restored in Washington, the value of the dollar will crash....putting everyone in a situation like the Great Recession of the early 1930's.  Here's a good "picture" of just how rapidly our Nat. Debt is increasing......

https://usdebtclock.org/


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