51M. As a child I had a children’s saving account with compound interest. My $100 went up to just below $200 in around 4 – 5 years. That seems like peanuts, but to a kid that was a lot.As a young adult, in the mid 1990s, I remember my older colleagues were talking seriously about CD interest rates to put away for up to five years, at 6%.
Now, in 2024, with the major banks, a one-year CD from Bank of America is 0.03%. Maximum rates for 5 years is 2.5% at Chase, no matter how much money you put away. Savings accounts compound interest rates are 0.01%, max, IF you maintain at least $10,000 in the account.Yet interest rates for a housing loan are at 7% and putting housing purchases out of reach. How can the banks do this?
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In: Economics
Chase Savings just suck. The average savings rate is like .46%. Ally’s is currently 4.35%. There are other banks with high-interest savings.
Also 7% for a mortgage is not even really high. It’s only relatively high compared to the post crash era and because of the competitive nature of the housing market in recent years. If you were a kid in the 70s or 80s the mortgage on your house was almost certainly more than 7% and rates around that time got as high as like 17%.
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