Low interest rates have helped the economy recover from the
financial crisis. But it has also hurt savers, and
, Citigroup ,
Bank of America
, and other big banks seem stingier than ever when it comes to
paying interest on bank accounts. Will a trend toward rising
rates help savers?
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, looks at where investors can get
better rates from banks. Dan notes that big banks like the
aforementioned ones don't have much incentive to pay attractive
rates to depositors, as they can get funding cheaply through the
Federal Reserve and currently have more than enough liquidity for
their own needs. By contrast, Dan recommends looking at smaller
banks and credit unions, which have to fight to get the capital
they need to operate effectively. Dan gives one solid example of
a financial institution paying almost a full percentage point
above the next-highest bank on five-year CDs, noting that it pays
to shop around for the best deals you can find.
Be smart with your savings
Having money in the bank is important, but it's no substitute
for investing for growth. Your best investment strategy is to
buy shares in solid businesses and keep them for the long term.
In the special free report, "
3 Stocks That Will Help You Retire Rich
3 Stocks That Will Help You Retire Rich," The Motley Fool
shares investment ideas and strategies that could help you
build wealth for years to come.
Click here to grab your free copy today.
owns warrants on Wells Fargo, JPMorgan Chase, and Bank of
America. The Motley Fool recommends Bank of America and Wells
Fargo and owns shares of Bank of America, Citigroup, JPMorgan
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