Fed Cuts Good for Banks but Not Seniors

Last weeks moves may offer little relief to the average consumer

a fixed income, whose capital is invested in bank deposits or CDs, will be receiving an even lower rate on those investments.”

A year ago, 5% on a CD with a 5-year maturity wasn’t hard to find. Now it is. One-year CD rates are about 2.90% and 5-year CDs are at 3.23%. Savings accounts rates could drop to around 2% in the next few months. Visit www.bankrate.com for updates on nationwide rates on CDs, money markets, mortgages, home equity loans, car loans, and credit card rates.

Tyler says that with financial intuitions able to borrow a lot more cheaply, some of those savings will pass on to consumers. As borrowing costs come down, individuals and corporations will be able to borrow at cheaper rates. “The Fed is trying to do everything it can to get people to borrow and to go out and spend money,” he says.

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