November 21, 2008 Update
The chart below shows that certificates of deposit (cd) as well as savings and money market accounts continue to hold up despite the weakening economy and the prospect of the Fed cutting rates to .75% or even .5%. We've been writing about this trend for some time and it has recently been picked up the main street business press. Both the Wall Street Journal and Bloomberg wrote last week about how bank's needs for cash were driving the rates on deposit products higher.
The chart does show though, that rates have been experiencing a very gradual decline since peaking in early October. If the Fed does cut by another 50 basis points down to .5%, as the markets seem to think it will, then it's hard to imagine that rates on savings accounts, cds, and money markets won't fall further.
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Related Articles:
NY Times Article on How Low Interest Rates Hurting Investors by Sam Cass - Dec 25, 2009
Etrade Drops Rate, Offers $25 Bonus, and Financial Health by David Walsh - Feb 12, 2008
For opportunists, IndyMac CD yields are a bonanza by ktexas - Jul 09, 2008
Rate uncertainties - How secure are those high-yield bank interest rates? by ktexas - Jul 04, 2008
Everbank Rates by Everbank Info - Jul 23, 2007
Why Do People Stash Money in Low Rate Accounts? by BankMan - Aug 02, 2007
Countrywide and E-Loan Raise Rates while Treasury rates fall sharply by BankMan - Aug 17, 2007.
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