With a 1.25% drop in the Federal funds rate in just over a week, this signals bad news for the cash in your savings accounts. Whether it be high-yield online savings or more traditional bank and money market accounts, you will be seeing lower rates. We have been spoiled with nice rates on cash for a couple of years, but the tide is turning. As long as the economy is struggling, we may even see further rate cuts.
The real problem is that while interest rates are going down, inflation is still a major concern. Many savings accounts will now hardly be able to keep up with inflation, or possibly return less. This can have significant implications on your cash reserves. So, what changes do you see yourself making with your cash given the circumstances?
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.