Historically, when the Fed lowers interest rates; banks and credit unions understandably lower their rates as well. However, when the Fed lowered their rate to 0% in March of this year; financial institutions did not just lower their rates once in response; they have universally lowered their rates many times since then: precipitously and unpredictably--which lowers customer trust and confidence. How surprising that there does not seem to be even one financial institution to take a wiser approach: to have lowered their interest rates on a one time basis to the necessary APR, and then to leave it there until the zero interest rates have passed. During these uncertain times, that approach would inspire consumer confidence and loyalty, knowing that their chosen financial institution has stabilized rates for their customers. For example, my own bank, American Express, has historically been less reactive than other financial institutions, but unfortunately has taken the same frequent/precipitous approach to lowering saving rates as other financial institutions: they are now down to .80%. If instead, they had lowered their rates on a one time basis (e.g., from 2.00% to 1.25%) after the Fed zeroed out--and left the rate there for several months; they would not only have inspired confidence with current customers, but also attracted new customers who do not want their chosen financial institution to be a weather vane.
