Interest rates have been depressed since 2008 and have only started making a meaningful recovery in about the past year and a half. If you have not been paying attention, it is time to start monitoring them again. Take advantage of these rising rates to power up your savings.
There are individuals who are only focused on accumulating money as they work with no regard fort the interest rate they are getting on their savings. I applaud them regarding their ambition to save because it is a better place to be than those who are not making a concerted effort to do the same.
However, by having their money in an account that is paying 0.01% (check your local bank), as is the case for many, they are hurting growth power of their savings. As I have mentioned before, there are many tools online that will show the banks that pay good interest rate on savings accounts. I take advantage of those tools by choosing the banks I am comfortable with that also offer good savings interest rates.
Some people want to stick with their local bank, and I respect that because we should be comfortable with wherever we keep our money. If these individuals want to stick with their local bank that do not offer decent savings interest rates, they can take advantage of Certificate of Deposit (CD) ladders. These allow them to spread their money across various CD’s without having all of their money stuck in lower yielding CD’s while rates are rising. This can also be applied to the attractive CD’s available from the online banks.
Another group are individuals who are not only unaware of the interest rate they are receiving on their savings account, but are also in the dark about what they are paying on debt they carry. My hope is that they would focus on both and try to put their money to work more efficiently. They should monitor the interest rate on their debts while renegotiating when and if they can.