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Savings Account Rates Fall to Record Lows!
By Anthony Vignocchi

Consumers keep stuffing cash into savings accounts and losing money in the process. It's like stuffing cash in the porthole of a boat.

Bankrate.com's Fall 2003 Savings Account Survey of passbook and statement savings account  interest rates shows savers continue getting a raw deal. Interest rates have reached an all-time low since they began tracking them in 1987. These super low rates don't even come close to keeping up with the economy's low inflation, so you loose money, PLUS you also get to pay taxes on the interest, again you lose money.

Even though savings account rates are skimpy just about everywhere, there's a significant difference between what you earn at a bank vs. a thrift or saving institution. The national average for banks is 0.38 percent on passbook accounts, and Thrifts, on average pay 0.60 percent on their passbooks. There are also regional differences, metro Detroit pays 0.93 on average for passbook accounts and metro Philadelphia pays on average 0.29 percent on its passbook accounts.

Banks keep dropping savings account rates because they know consumers have few alternatives. The steep rise in deposits may be due, in part, to insecurity stemming from 9/11 and the threat of terrorism. Consumers may feel a need to hold high levels of cash. It's a decision that may not be particularly beneficial.

Looking at the debt levels, consumers don't seen to be paying it down, they're taking on new debt. With all the 0 percent financing going on consumers are buying more and more.

As to the new Wal-Mart statistics, consumers are running out of money to buy things on the 12-13th of the month, two days short of getting the next paycheck. Given the rate they're paying on credit and the rate they're getting on deposits, it's not an economically sound decision.

According to Health Education and Welfare, consumers should have three to four months income in a savings account for emergencies in spite of low rates.

The rest should be invested to help meet longer term goals.

I Specialize in investments for retired consumers, call me for an appointment to review your holding, and help get you back on track for a bright future.

STOP WASTING YOUR RESOURCES

Anthony J Vignocchi
Financial Advisor
Raymond James Financial Services, Inc.
2750 Stickney Point Road, Suite 107
Sarasota, Florida 34231
(941) 922-8588


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