With bank deposit rates at historic lows, personal bankruptcies are at all-time highs.
That’s not what the government intended when it launched “Recovery Summer” in June.
The Administrative Office of the U.S. Courts reports that U.S. bankruptcy filings are at the highest levels since 2005. Overall, there were 422,061 bankruptcy filings between April and June, a 9% uptick from the previous three-month period, and up 11% from the same period last year.
It’s plain to see that consumers are faring worse with the financial catastrophe. The AOUSC reports that consumer bankruptcies rose by 21% for the year, compared to 9% for businesses.
Such numbers don’t bode well for the U.S. economy either, nor do they bode well for bank deposit investors. The worse the economic conditions, the lower the bank rates will drop. That’s primarily due to the downward pressure the Federal Reserve continues to apply to interest rates. The Fed wants rates low to open the credit pipelines, encouraging people and businesses to borrow and spend enough to propel things forward.
That strategy hasn’t exactly panned out as the Fed has hoped, as banks and lenders continue to lend sparingly. But it’s what we can expect for the short-term at least.
For now, bank investors need to dig deep to find the best rate deals, and that’s where Deals of the Week can help.
Let’s start this week with a nice (and free) checking account deal from Farmers State Bank.