When Will We See 6% Money Market Accounts?

Jul 2, 2006 - 2:47 PM by Ken Tumin

Now that several savings accounts are reaching 5%, when will we start to see 6%? It was just over 9 months ago when EmigrantDirect became the first since 2001 to offer a 4% savings account. This Bankrate.com article has a discussion of what the future may hold for interest rates.

One interesting point that was mentioned in that article is that the Fed's rate hikes may actually have a stimulative effect on the economy that could add fuel to the inflation fire. The article has a quote that states: "Every point the Fed raises rates creates about $50 billion in annual interest income."

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Fear-n-Greed (anonymous) - #1, Sunday, July 2, 2006 - 9:53 PM

Does the quote take into account that as rates move higher less and less people will be taking out unecessary new loans. Especially the riskier types such as "exotic" mortgages and high interest comsumer debt.

Then again, I heard one of the FOMC guys quoted awhile back saying: "Never underestimate the American peoples ability to buy things they don't need with money they don't have" :)

Banking Guy (anonymous) - #2, Monday, July 3, 2006 - 7:35 AM

Yea, I'm not sure how much of a stimulative effect higher rates may have. I think most Americans don't have big savings so the higher rates in savings account probably won't have much of an effect. As you mention, I think higher rates effect on loans will have a larger impact so it may have the anti-inflation effect that the Fed wants.

procol (anonymous) - #3, Thursday, July 6, 2006 - 8:50 PM

Look, they robbed savers for 3 years with ridiculous low rates, and handed the money over to homebuyers that overpaid with YOUR money.

About time that game ended.

When Will We See 6% Money Market Accounts?

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