Low Interest Rates Hurt Those With Money
Money market and CD rates are very low right now. No matter how hard you look or where you look, you will not find any rates that will make you very happy. For someone who relies on interest income, this is a very tough time right now. Retired people usually fall into this category as the only two income sources most retirees have are Social Security and interest from their savings.
There is really no safe place for anyone to put their money and get a reasonable rate of return. Older people need to have their savings in something safer than the stock market because they might need the money at any time and they cannot afford the risk that comes with the stock market. It is true that they might not have to worry about losing a job like many folks do, but their income has taken a big hit too.
Retirees usually have most of their money in CDs and government bonds. This is because those rates are historically higher than those you get with a money market account. Most money market accounts will let you make periodic withdrawals and you can also take your money out at any time. This means you get a lower interest rate in a money market in exchange for the ability to always have access to your money.
Money market accounts are a place to park money that is in transition and they are very common in stock market portfolios and stockbroker accounts. No matter how much you search, you will not find any interest rates that are anywhere near as high as they were 3 or 4 years ago. Anyone that has extra money and wants a safe place to put it should be prepared to get little in return.
Anyone who is unhappy with these low interest rates and is willing to take more risk should look into something called social lending. With social lending, you are lending money to another person rather than a banking institution. There are several online websites that match lenders with people who need the money and are willing to pay a higher rate. There is more risk with this type of loan because the person could default on the loan. However, anyone wanting to find higher interest rates should look into social lending as a possible solution. - 23311
There is really no safe place for anyone to put their money and get a reasonable rate of return. Older people need to have their savings in something safer than the stock market because they might need the money at any time and they cannot afford the risk that comes with the stock market. It is true that they might not have to worry about losing a job like many folks do, but their income has taken a big hit too.
Retirees usually have most of their money in CDs and government bonds. This is because those rates are historically higher than those you get with a money market account. Most money market accounts will let you make periodic withdrawals and you can also take your money out at any time. This means you get a lower interest rate in a money market in exchange for the ability to always have access to your money.
Money market accounts are a place to park money that is in transition and they are very common in stock market portfolios and stockbroker accounts. No matter how much you search, you will not find any interest rates that are anywhere near as high as they were 3 or 4 years ago. Anyone that has extra money and wants a safe place to put it should be prepared to get little in return.
Anyone who is unhappy with these low interest rates and is willing to take more risk should look into something called social lending. With social lending, you are lending money to another person rather than a banking institution. There are several online websites that match lenders with people who need the money and are willing to pay a higher rate. There is more risk with this type of loan because the person could default on the loan. However, anyone wanting to find higher interest rates should look into social lending as a possible solution. - 23311
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posted by Mr. Forex at
2:30 AM
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