2011 Banking Customers Notice One Trend In Reviews

When it comes to bank reviews, 2011 customers are going to find that one trend seems to be evident, and that is incredibly low interest rates on saving and investment vehicles. Sadly, even the top rated banks in the industry simply cannot offer much more than a percent or even a fraction of percent of returns on investments.

The reason behind this is the current economy. Interest rates are simply low, and while that is good news for borrowers, it is not at all good news for those trying to invest and save. The average rate across the board in the United States in 2011 was 0.18 percent. That is hardly worth saving money for, in the eyes of many investors. Because of this, when they are looking at bank reviews, 2011 customers will find that the best banks are those offering one percent. While this may not seem like much, it is significantly higher than the average rate, making these the best choice at the moment for those who are looking to invest.

What Lowered Interest Rates?

Interest rates have been low for quite a while. Even high-yield savings accounts are yielding very little, as banking industry reviews and comparisons show. Many who are looking to save are left to wonder why rates are so low.

The simple answer is that rates are low because of the economy. A weak economy makes people much less likely to borrow money. When people do not borrow money, interest rates come down. This is a simple case of supply and demand. Banks hope that lowering their interest rates will make consumers more interested in borrowing, driving up demand.

Yet, when banks lower rates on loan products, they also have to lower rates on savings and investment products. Without the income from loans, they do not have money to pay savings account owners. Add to this the fact that the Federal Reserve keeps lowering federal interest rates, and you have a situation where rates are at all time lows.

Now, in theory this should work. Lowering interest should cause more people to borrow, putting more money in the banking industry and leading to a slow rise in interest. Yet, we have been in this boat for several years, so it is not working out this way. Many believe this is because Americans are hesitant to borrow, even with attractive rates, because of he current economy and their existing debt struggles. Also, banks are not lending as freely, even though they are trying to get more loans out there, because they have lost a lot of money on the housing loan crisis. So, we are left with a situation where rates on savings vehicles are low, and there doesn’t appear to be any way to see them increase in the near future.

As you are looking for a new bank, you are going to have to look beyond the bank’s savings account rates. There are simply not good rates out there, no matter how you look at it. So, look at the other things the bank offers as you make your decision.