Why Rising Interest Rates Won't Benefit Savers
"For savers, there’s really nowhere to hide. Rising rates on Treasury bonds make those a slightly better investment, yet most people buy Treasuries through bond mutual funds, which stand to lose money as rates go higher. Investors who buy bonds directly will benefit from the rise in interest payments, but only if they hold the bond for the duration of the note. It’s also possible rates could drift back down as investors get more comfortable with the prospect of a Fed pullback, which would make bonds paying current rates a good investment. But that would require the kind of risk-taking conservative savers usually prefer to avoid."
"Part of the Fed’s overall strategy has been to push interest rates so low that traditional, risk-averse savers move their money out of “safe” assets into riskier, higher-returning investments such as stocks. That seems to be one part of the strategy that hasn’t really changed. Die-hard savers can complain all they want about Bernanke & Co., but fighting the Fed still doesn't look like a smart financial move."http://finance.yahoo.com/blogs/the-exchange/why-rising-interest-rates-won-t-benefit-savers-191034426.html