Deposit Rates Vs. Inflation: A Battle Of Attrition
Like low prices, low bank rates are also a product of weak demand. In a lackluster lending environment, banks don't have a particularly great demand for capital. Meanwhile, they've had no trouble attracting deposits, even at minimal interest rates. So, awash in deposits they have little productive use for, banks don't have a strong incentive to raise their interest rates.
Thus, even low inflation is hard for savings accounts to beat. While you may not beat inflation, you can take a much bigger dent out of it if you shop around for the most competitive bank rates. Unless weak demand drives inflation even lower, or until stronger demand pushes bank rates higher, taking a bigger dent out of inflation may be the most you can ask for.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV