What Savings Account Rate Can I Expect in the Wake of a Recession?

Answer 1

In the wake of the Great Recession, many investors did not know exactly what to expect. The economy was officially in a state of recovery, yet many businesses and individual citizens were still caught up in the middle of what seemed like uncertain times. Many statistics also showed that the greatest portion of the recovery was actually going to the top 1%. All of this uncertainty in the larger market actually did not show through in the savings rates of banks.

Normally, uncertainty in the marketplace makes banks keep their interest rates up in order to attract more investors who would otherwise hold onto their money. However, because of the bailout packages that were given to many large actors in the financial industry, bankers had no real reason to keep interest rates high for the average consumer.

This phenomenon was especially true for the larger, multinational banks. It was less true for the local community banks and the smaller state and region oriented banks. In the worst part of the recession, people were able to find savings interest rates of more than 5% in these local banks. These banks frequently advertised outside of their immediate demographic for the first time in their history in order to attract customers towards the savings rates.

Now that the country is more or less in a state of recovery, the state and regional banks have begun to lower their savings interest rates. However, they are doing so in a slower fashion than the bigger banks for fear of blowback from the uncertain recovery. Many personal financial advisors are telling investors to watch the state and local banks closely through the internet.

There are many websites that have the sole purpose of watching and comparing interest rates from banks that do not have the money to advertise on television and radio outside of their local markets. These websites have served as a hub for many investors who are looking for high savings account interest rates in the recovery period after the Great Recession.

Many investors can actually expect interest rates near the recession rates of 2009 or even 2010. Many state and regionally-based banks are still quite happy to pay more for verifiable customers.