High Yield Savings Account | Why Bother at Present Rates?

High Return Savings Account — Fri, 25 Sep 2009 12:26:01 +0000

People ask me why open a high yield savings account these days when rates are only 1.35%? In all fairness that is a good question, because there are plenty of higher paying CDs out there – but CDs as we know have their problems too. Making a decision to open a high yield savings account when rates are so despondently low these days doesn’t seem like a good use of spare cash – but there are benefits to doing it. Let’s look at a few reasons. Inflation May Be at Historic Lows Presently I recently saw in my savings bond email that the inflation rate for the inflation adjusted savings bonds I own was actually negative for parts of the last twelve months, indicating that we experienced a period of DE-flation. Deflation was one of the great cataclysms of the Great Depression of the 1930s. Deflation is a price scenario when the price of goods is dropping (think automobiles over the last year) and yet no one is buying. Note that automobile sales didn’t pick up until the government stepped in and started shelling out cash for clunkers to get cars moving. Watch what happens to auto sales once the money [...]

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High Yield Savings Account | Why Bother at Present Rates?