Why Interest Rates on Savings Accounts Are Still So Low

Odd Lots

Bloomberg

News, Investing, Business, News Commentary, Business News

4.4 • 1.6K Ratings

🗓️ 23 February 2023

⏱️ 43 minutes

🔗️ Recording | iTunes | RSS

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Summary

The Federal Reserve has been raising benchmark borrowing rates at the fastest pace in decades, but the interest rate paid out to millions of people with bank accounts is still stuck at almost zero. According to data from Bankrate, the average interest rate on savings accounts is just 0.23%. So what's going on? Why have many banks so far avoided raising what they pay out to depositors even as the Fed hikes, and will that eventually change? What does it mean for the financial system and also economic policy given that higher rates are, in theory, supposed to encourage less spending and more saving in order to curb higher inflation? On this episode, we dig deep into the making of bank deposit rates with Barclays strategist Joe Abate.

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0:00.0	Do you know what your interest rate is on your savings account?
0:02.6	I bet it's lower than you think.
0:04.3	Go ahead and look.
0:05.2	And in the meantime, I'll tell you about US Treasury bills on public.
0:09.2	As of 9-1-2023, you could earn an annualized 5.5% yield with T-bills when held to maturity.
0:16.2	That's the highest rate on six-month Treasury bills since the year 2000.
0:20.0	Go to public.com slash T-Bill podcast to get started.
0:23.8	This is a paid endorsement by public.com,
0:26.0	fees and conditions apply.
0:27.3	Treasury accounts at public.com or through GICO Securities Inc.
0:30.4	Member Finra and SIPC.
0:31.8	Full Disclosures can be found at www.public.com slash T-Bill podcast.
0:37.4	This is Barry Rittalty to tell you about another podcast we think you'll love listening to.
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1:00.1	On Apple, Spotify or wherever you get your favorite podcast.
	...

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