yeah, those banks? they don't really want anyone's money

[winterbadger]

Banks are in trouble right now, yeah? They really need all the cash they can get to stay afloat, right?

Apparently not. Because when I checked about renewing the CD I have my liquid nest egg in, the *best* rate they can offer me is around 2%, and that's for a 12-month deposit. The rate they're offering for something like I have now is around 1.7%. The CD I currently have is over 3%, and that was relatively short term.

This tells me that they don't really *want* my cash, because they're not willing to offer me anything much to borrow it. I need to finally take the time to sit down with my retirement account manager, but I'm tempted to follow the president's advice and put my money into actual investments. Yes, the market is probably going to go down some more before it goes up, but it *will* go back up. And 2% is derisory!

Comments

[soshesays.livejournal.com]

My CD matured and went down from 6% (a promotional rate three years ago) to 1.75%. Seriously? I yanked it out of there and shopped around for a better rate. But they're all pretty dismal right now. Ugh.

[kathygnome.livejournal.com]

I was considering tossing money into an index fund as well. We don't need it in the short term and at some point the market will go back up or if not, it won't matter anyway.

[ethanninis-mom.livejournal.com]

That is the "bad" side of low borrowing rates. Of course, you can't borrow any money, but if you did....

You are getting just safety. Some banks are having teaser rates (as soshesays said below).

If you think of it, a 1.7% return is dismal, but not compared to the losses people are taking on the stock market right now (I don't even look at our retirement account...)

[winterbadger]

It's just that what banks need to get out of financial difficulty right now is money. So they ought to be offering good rates for people to bring in their money and loan it to the bank.

Likewise, they need income. So they should not be giving people unusually good deals on loans. Decent, so as to get them to borrow, but not great. Instead, according to the real estate agents I've talked to, they are being conservative about who they loan to (finally--wish they'd done that a while back) but giving them really good deals on loans if they qualify. Mortgages at or around 4% are not unknown.

This is all about the farthest from what banks ought to be doing as possible. But, you know, they've been shown in the past six months that it really doesn't matter what they do--they can screw up as much as they want and the Federal Government will cover them.

I'd really like to see some bank FAILURES. The FDIC would still insure all of our holdings in the banks (up to $250K--any of us here have more than that in the bank?), but the people running them would be OUT OF A JOB. No more multimillion dollar salaries and bonuses. No more big parties and conferences. There would be new banks, which would need to employ all the people who actually do the *work* in banks. But the CEOs and upper management would be out on the street, Where, IMO, they belong.

[magaidhbhan.livejournal.com]

...aaaand on the other side of the financial world, the APR on my credit card just went up to -- wait for it -- 29%. It started at, um, 13%? Maybe 17% after the last panic? (I'm terrible, I don't really pay much attention to it as a general rule, since I try to pay off everything at the end of every month -- but boy, *that* sure caught my eye!)

And I have *good* credit. Thank god there's nothing big just sitting on that card right now.

[winterbadger]

Yeah, a large chunk of my CD is going to pay off my credit cards (which have a pile of soccer_fox's tuition and stuff on them); the finance charges are a lot more than I'll be making holding the money in savings or even in CDs.

[ban-leodhasach.livejournal.com]

I could turn in to the boring banker and try to explain why you are getting such a low rate - but then you would probably be asleep before you finished reading it!

All I will say is that due to the low borrowing rate the banks are not receiving as much interest in to allow them to pay a higher interest rate out. (appreciate it is a very simplistic answer - but as I said before didn't want to bore you!