Bank Savings Rates, Fiscal Cliff and the Economy

By now you probably have heard about the fiscal cliff and the damage falling off the cliff might do to the economy. I just heard and interesting survey released by Walmart which polled some of their shoppers on the fiscal cliff. Before election day only 25 percent of their shoppers heard about the fiscal cliff and about a week after the election 75 percent of shoppers were aware of the fiscal cliff. Of those 75 percent about 15 percent said they plan to spend less on the holidays.

So you can say some of the damage to the economy has already been done since the Democrats and Republicans can't even agree how much revenue to raise and how much spending cuts there should be. That has been the sticking point up until now but even when that is figured out they then have to decide who pays more taxes and what programs are cut. After that is decided the agreement has to pass both the House and Senate which seems very unlikely since both sides are already complaining about a deal that hasn't even been decided on.




The funny thing right now is the markets believe a deal is going to happen and have been rallying the past six days. I believe everyone is in for a rude awakening because a deal is far from being made. In the short term the amount of tax hikes and spending cuts will throw the economy back into a recession but in the long run the economy will get better and the country will be a lot better financial position which will further help the economy grow.

If you're financially secure and have a job you don't think you'll lose if we head over the cliff then you probably don't mind because you know in the long run everything will be better. If you're not financially secure and you're job is in jeopardy if we fall off the cliff then falling off isn't acceptable.

One thing is for sure the markets are going to be in for a ruff period not only because of the cliff but also because the debt ceiling limit which the country will hit in the first quarter of 2013. That might be a bigger fight and cause wild swings in the markets. That being said I would sell into this rally and park some cash into a good old fashion savings account or money market account.

Granted average money market rates are very low, in fact in this past week's rate survey released by the FDIC the average money market rate was at 0.11 percent. Average savings rates are even lower in the survey this week averaging 0.08 percent. The best savings rates and money market account rates are many times the averages but still just above 1.00 percent but at least your principal will be 100 percent safe as long as you keep the deposit amount with interest under $250,000.

I have compiled a list of the highest savings account rates and money market rates below to help you make sure you get the best rates.

 

Savings Rates



  • Barclays Bank Savings Rates 1.00% APY 1.00%

  • Ally Bank Savings Account Rates 0.95% APY 0.95%

  • American Express Savings Interest Rates 0.90% APY 0.90%

  • Colorado Federal Savings Bank Interest Rates 0.85% APY 0.85%

  • Discover Bank Savings Rates 0.80% APY 0.80%

  • Bank of Internet Savings Rates 0.80% APY 0.80%

  • ING Direct Savings Account Rates 0.75% APY 0.75%


Money Market Account Rates



  • Sallie Mae Bank Money Market Interest Rates 1.04% APY 1.05%

  • Union Federal Savings Bank Money Rates 1.04% APY 1.05%

  • EverBank Money Market APY 1.01%

  • Able Banking Money Rates 0.96% APY 0.96%

  • Ally Bank Market Rates 0.95% APY 0.95%

  • MetLife Bank Money Account Interest Rates 0.85% APY 0.85%

  • Bank of Internet Money Market Account Rates 0.75% APY 0.75%


As you can see all the savings rates and money market rates listed above are well above the FDIC national average rates. All the banks listed here also have deposits insured by the FDIC for up to $250,000 per account. All the banks listed on our rate tables have deposits insured by the FDIC. S
 
Author: Lisa Graham
December 12th, 2012