A while back I did a post about the death of the “high yield savings account“.
Now, over a year later, rates are only lower.
Yep, the days of a 4-5% yield for an online savings account are gone. But will they ever return?
Not any time soon, say most economists.
2010 has been a year of massive withdrawals by investors from equities (stocks) and into more conservative investments (bonds, treasuries, CD’s, etc).
And it’s a simple law of supply and demand. There is lots of supply of money going into these lower yielding investments, which in turn, drives yields even lower.
So don’t expect to see rates on savings accounts up anytime soon. The fed plans to keep interest rates low for the foreseeable future. They see any interest rate hike as a potential knock-out blow to any type of recovery we might get here in the US.
As for me, I am still keeping a good chunk of my savings in online savings accounts and away from stocks. I still don’t see myself investing heavily, if at all, in the stock market anytime soon, give my past with the darn thing.
Are you moving money into lower risk investments? Have you this year?
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