Fed Rate Cut Not Helping Consumers
Borrowing costs continue to rise for homes, cars and other loans even as interest rates drop for money market, savings and checking accounts.
In short, consumers are getting squeezed at both ends despite the Federal Reserve's decision to lower its benchmark rate to 1%.
Mortgage rates ended the week higher after temporarily edging lower following the Fed's cut. On the savings front, however, interest rates keep falling for CDs, money markets, savings and checking accounts.
For potential home buyers, the best rate is currently being offered on one-year adjustable-rate mortgage, with the national average at 6.2% Friday compared with 6.16% the week before, according to BankingMyWay.The average 30-year fixed rate rose to 6.59% from 6.52% last week, and a 15-year fixed rate costs 6.41% vs. 6.29% last year. Buying a new car on credit also got a little more expensive, with a 36-month loan at 6.79% today compared with 6.77% a week ago. Used-car buyers are being charged 7.32% for a 36-month loan, up from 7.31% last week. Keeping money in the bank, though, won't provide much upside. Money market rates and savings accounts are holding steady at 0.94% and 0.41% respectively. CD rates offer better returns, but they are coming down. Across the nation, the average interest on a 60-month CD dropped to 3.34% from 3.36% and the average rate paid on a 24-month CD dropped to 2.62% from 2.66%. For short-term savings, a three-month CD currently delivers 1.71%, down from 1.72% a week ago. Since these are national averages, better rates may be available in local areas. BankingMyWay lets users search by ZIP code to find the best rates for a variety of loans and savings accounts.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV