SavingsTalk.com

papen · 10-31-2007, 03:03 PM

im about to open a high-interest online savings account, and i've been looking at the current interest rates on bankrate.com. i was thinking of banking with HSBC, but their rate is 4.5% as opposed to some of the others that offer slightly higher, around 5%. but i have been told that if i jump into the one thats at the top right now, that rate could come down in a couple of months. HSBC was at 5.05% a few months ago, and now that they are down to 4.5%, should i expect that to go up eventually? what should i do?

Marush · 10-31-2007, 03:03 PM

idk

GURU · 10-31-2007, 03:03 PM

Bank interest rates can change as often as daily depending on the bank. Some banks that don't have the overhead associated with a traditional "brick and mortar" operation can be extremely competitive such as http://home.ingdirect.com/products/products.asp. On the other hand, there isn't a place to go to complain or to just feel comfortable that your money isn't being handled by loonies.

The thing to do is to monitor your accounts periodically and move your money when it is appropriate to do so. Don't be lazy or afraid to take your business elsewhere. Also, many community banks will rate-match, or offer some other incentives if you have a decent amount of money to put on deposit.

Wastedspace · 10-31-2007, 03:03 PM

The interest rates that banks offer on savings accounts change according to the underlying interest rates in the economy, and those are set by the Federal Reserve via its Fed Funds rate. If you want a fixed rate on your savings, consider buying a certificate of deposit (a CD). That will guarantee you the same rate for the life of the CD, which can be as short as a month or as long as five years. You can compare current rates on savings -- or deposit -- accounts and CDs at bankrate.com. When comparing rates it matters how the interest you earn is credited to the account (daily, monthly, annually &c). So look for the APR which is a standardized way of measuring interest.

Luca · 10-31-2007, 03:03 PM

Everything that has anything to do with the interest rates of banks can be traced down to the Federal Reserve.

The Federal Reserve was established in 1903, if i'm not mistaken, to create liquidity and stability amongst for our currencies and banking institutions. In order to do this
we have also given the Fed complete control of our loan interest rates so that they can control inflation and prevent recession.

When inflation is high, people are discouraged to consume, so everyone starts to not buy stuff and not get jobs. When this happens, the Fed can lower interest rates to prevent a recession. With no money swooshing around the community, the Fed can put some there by granting everyone good deals on loans.

When they do this, you should understand that you are competing with the lending rates of the Fed because you too are 'lending' the bank your money when you make a deposit. Since they can't turn down your business, Banks simply give you the interest rate dictated by the Fed.

10-31-2007, 03:03 PM	#1
papen Greenhorn Join Date: Jul 2006 Posts: 21 Rep Power: 6	how much do bank interest rates change? im about to open a high-interest online savings account, and i've been looking at the current interest rates on bankrate.com.<br />i was thinking of banking with HSBC, but their rate is 4.5% as opposed to some of the others that offer slightly higher, around 5%. but i have been told that if i jump into the one thats at the top right now, that rate could come down in a couple of months.<br /><br />HSBC was at 5.05% a few months ago, and now that they are down to 4.5%, should i expect that to go up eventually?<br /><br />what should i do?<br />

10-31-2007, 03:03 PM	#2
Marush Greenhorn Join Date: Jul 2006 Posts: 22 Rep Power: 6	how much do bank interest rates change? idk

10-31-2007, 03:03 PM	#3
GURU Greenhorn Join Date: Jul 2006 Posts: 5 Rep Power: 0	how much do bank interest rates change? Bank interest rates can change as often as daily depending on the bank. Some banks that don't have the overhead associated with a traditional "brick and mortar" operation can be extremely competitive such as http://home.ingdirect.com/products/products.asp. On the other hand, there isn't a place to go to complain or to just feel comfortable that your money isn't being handled by loonies. The thing to do is to monitor your accounts periodically and move your money when it is appropriate to do so. Don't be lazy or afraid to take your business elsewhere. Also, many community banks will rate-match, or offer some other incentives if you have a decent amount of money to put on deposit.

10-31-2007, 03:03 PM	#4
Wastedspace Greenhorn Join Date: Jul 2007 Posts: 22 Rep Power: 5	how much do bank interest rates change? The interest rates that banks offer on savings accounts change according to the underlying interest rates in the economy, and those are set by the Federal Reserve via its Fed Funds rate. If you want a fixed rate on your savings, consider buying a certificate of deposit (a CD). That will guarantee you the same rate for the life of the CD, which can be as short as a month or as long as five years. You can compare current rates on savings -- or deposit -- accounts and CDs at bankrate.com. When comparing rates it matters how the interest you earn is credited to the account (daily, monthly, annually &c). So look for the APR which is a standardized way of measuring interest.

10-31-2007, 03:03 PM	#5
Luca Greenhorn Join Date: Jul 2006 Posts: 20 Rep Power: 6	how much do bank interest rates change? Everything that has anything to do with the interest rates of banks can be traced down to the Federal Reserve. The Federal Reserve was established in 1903, if i'm not mistaken, to create liquidity and stability amongst for our currencies and banking institutions. In order to do this we have also given the Fed complete control of our loan interest rates so that they can control inflation and prevent recession. When inflation is high, people are discouraged to consume, so everyone starts to not buy stuff and not get jobs. When this happens, the Fed can lower interest rates to prevent a recession. With no money swooshing around the community, the Fed can put some there by granting everyone good deals on loans. When they do this, you should understand that you are competing with the lending rates of the Fed because you too are 'lending' the bank your money when you make a deposit. Since they can't turn down your business, Banks simply give you the interest rate dictated by the Fed.

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