A full page ad in today's New York Times makes us wonder today whether it's time for the advertising industry to figure out new ways to promote savings accounts in banks. "High yield" and .9% interest are not compatible, at least for a generation who grew from infancy to adulthood on a standard 5.5% regular passbook interest.
Last week, the Federal Reserve said it will keep interest rates low through 2014, meaning the average yield on a savings account -- 0.1% -- isn't likely to change.
For what it's worth, the New York Daily News has tips today on surviving in a low-interest world.
Unhappy with my credit union and finding myself in a position to put money in a savings account for the first time in my adult life, I went looking for the best savings account. Turns out, I'm in the best one I could find. I'm getting, if you can believe it, 0.25% on my standard checking. Between that and my negative on the year 457b, I can see no actual reason to save money, except to have it in an emergency.
A year ago, our credit union was offering an astonishing 3.5% on checking accounts (provided you had direct deposit, 10 swipes a month on the debit card, and up to a limit of $25k). It has since dropped to 1.5%, and that's still the highest I've seen. And yet the savings rate in the U.S. continues to increase...sounds like more class warfare to me!
On the flip side, if you don't NEED a savings account, you can put your money at risk with a basket of stocks paying 3% or greater in dividends - regionally Deluxe, Xcel, Alliant Energy, among others.