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
My bank pays me 4.35% interest on my savings account.
BofA and Chase just hate you.
From the Chase site as of today….
Featured relationship rates
Available to our customers with a linked Chase personal checking account.
Chase Certificates of Deposit Interest Rates
CD TERM $0 – $9,999.99 $10K – $24,999.99 $25K – $49,999.99 $50K – $99,999.99 $100K – $249,999.99 $250K+
2-MONTH 4.50% 4.50% 4.50% 4.50% 5.00% 5.00%
What banks are you looking at ? just my savings is at 5.0%
Comes down to cost of funds. Banks don’t make 7% on a mortgage. They have to borrow cash from other banks and use deposits to lend money.
The cost of funds dictates the cost of rates. You will see cd specials when banks are looking to drum up funding. If it costs them 5% to get money from their bank, you may see a cd special at 4% to increase the yield.
There are plenty of places offering pretty decent returns on savings and cds but banks are smart. They’re not going to guarantee funds for 5 years at 6% when that could very well turn into a loss when rates come down.
There is no such thing as a savings account with compound interest. You have no idea what you’re writing.
I think you are remembering the past with rose tinted glasses, there is no way in living memory that 100 bucks would double in 4-5 years in a regular savings account. That would be over 15%
Robinhood offers a 5% apy on cash paid out monthly. Can withdraw your money out at anytime. Only downside is that you need to be subscribed to their Gold membership which is $60 a year, prob not worth it if you’re only keeping $200 in there.
My HYSA pays ~4.5%. No balance requirement, no withdrawal timeline. Ifs a floating rate but its a lot better than 0.03%.
If you cant get a good CD rate look at other short term savings products.
CDs, t-bills, money markets all have returns that hover around 4-5.5%
BoA has a 7month and 13 month cd around %5 for under 10K investments…
chase has a 9 month cs at 4.25%…
And turning $100 into $200 in 4-5 years would have rates around 14-19% which is unheard of for a savings or security.
I’m thinking this is a troll post
What are you smoking, my friend? CD rates have been hovering around 5% for most of the last year?
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