Continuing "Credit Crunch" Could Spell Higher Bank Rates Sometime Soon
February 18, 2010
The phrase "credit crunch" may seem, for the moment, like a relic of 2008. But upon closer inspection, it is clear that credit is not flowing freely whatsoever. This could lead to higher interest rates on CDs, money market accounts, and savings accounts if banks can figure out a way to put those deposits to good use in their lending operations.
Although the economic environment is certainly still bleak for businesses, the possibility that American businesses will once again enjoy success creates a perpetual need for banks to provide capital to budding entrepreneurs. After all, this is the American dream: to own your own shop, work for yourself.
In order to fund these new ventures, banks will need deposit money. Two years ago, banks could get money through a variety of "creative" methods. Today, those creative methods have by and large dried up.
Many banks are going back to basics: holding money on deposit, and then looking to lend out that money at a profit. If businesses can prove they can pay back these loans, banks will undoubtedly want to be in on the action.
An improvement in the condition of American businesses (and any other businesses, for that matter) would thus be great news for the conservative investors who have money in CDs, money market accounts, and savings accounts--that money would be in high demand again, leading to higher interest rates on deposits.
Mike666
22 February 2010 at 10:21 pm
I think Ben wants those old people that are living off their savings to just drop dead. I think that would make Ben happy, How can Ben not know he is killing old people that property saved for retirement ? Ben is not into helping average or even above average savers Ben wants all our money to go to his masters at Wall street and at the banks and bed wants us in a shallow grave frozen and hungrily waiting t die,
Thank you ben you rat basturd I will see you in hell and your getting bottom bunch we have no inflation just everything cost more KOL
Mike666
22 February 2010 at 10:11 pm
Throw Ben under the same rock he crawled out from under . Ben is just a wall street puppet.
When American's spend their hard earned savings and all our savings money belongs to wall street and the banks again then Savings rates will rise along with loans rates .
When the banks and wall street blow that money Ben will allow them to use our money again for just about free. This cycle will repeat endless until the Ben gets thrown out and the barn door closed and locked so he cannot throw any more BS at the American citizens.
The Goman
21 February 2010 at 2:28 pm
I have taken all my money out of th banks because the rates are not worth it. I am doing much better making small secritized loans. The Dems and Repubs need to work together to make this country work. But no, they work together to ensure the world trade organization can fill all the jobs it needs overseas. Free Trade or Fair Trade, that is the question.
Hoody
19 February 2010 at 6:20 am
Lets hope so! with costs rising more than the CPI says, and NO COLA's , those retirees with any savings depend on these rates.