Bank Accounts Fail To Follow Fed's Lead

November 12, 2004 07:47 AM

Bank Accounts Fail To Follow Fed's Lead

Excerpt: The Federal Reserve raised the nation's key short-term interest rate yesterday, but bank customers probably won't notice it. If the recent past is any guide, only a fraction of that increase is likely to find its way into savers' pockets.

The Federal Reserve raised the nation's key short-term interest rate yesterday, but bank customers probably won't notice it. If the recent past is any guide, only a fraction of that increase is likely to find its way into savers' pockets.

With its latest move, the Fed pushed up the benchmark federal-funds rate -- the rate banks charge each other for overnight loans -- by a quarter-percentage point, to 2%. That's a full percentage point higher than it was before the Fed began its recent series of gradual rate increases in late June.

Higher interest rates should be good news for savers, who've seen returns dwindle during recent years. But rates on savings, interest-bearing checking and money-market deposit accounts have hardly budged in recent months. For instance, the average savings account pays just 0.51%, according to Informa Research Services, a market-research firm.

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Read all 22 posts in the same category of Banking:

Going Online To Balance Family Budget - Feb 17, 2005
Banks Speed Process For Opening Online Accounts - Feb 04, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Online Banks Are Boosting Yields - Jan 15, 2005
Momentum Is Gaining for Cellphones as Credit Cards - Jan 10, 2005
Rebels With A Cause, And A Business Plan - Jan 01, 2005
Banks Boost Customer Incentives, But Rates on Savings Remain Low - Dec 27, 2004
Online Bill Paying: How To Get Started - Dec 27, 2004
Banks Test ID Device for Online Security - Dec 24, 2004
Paper Checks Going Bye-Bye? - Dec 08, 2004
Check It Out: Incentives to Pay Bills Online - Dec 07, 2004
'Gift Cards' May Come Loaded With Fees - Nov 29, 2004
Where To Keep Your Rainy Day Fund - Nov 29, 2004
What's Your Bill-Paying Personality? - Nov 28, 2004
Debit Cards Lack Protections Of Credit Cards - Nov 28, 2004
A New Era In Banking Begins - Nov 25, 2004
Automatic Debit Scams - Nov 22, 2004
ChexSystems Puts Him In Penalty Box - Nov 09, 2004
"Check 21" Starting in Late October - Nov 03, 2004
Gift Cards 04 - Nov 03, 2004
Save Electronic Checks for Your Taxes - Nov 01, 2004

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