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
The savings account built into my phone is 4.5%. I just started a CD at 5.25%. My other savings accounts are at 5%, and my cash sitting in my investment accounts is at 5%. I didn’t even shop around, I just kept my money in my accounts I’ve always used and their rates just went up. Just don’t put your money in a checking account.
What you’re describing is not what is happening right now, unless you mean specifically 6%, and it’s really just a function of inflation vs. the federal rates.
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