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Subject:  Low interest rates hurting savers Date:  2/6/2010  8:13 AM
Author:  wrjohnston91283 Number:  66746 of 100127

Just read an article on about how the current low interest rate environment is helping spenders, but hurting savings (especially retirees who were hoping to use interest income to live on).

According to the article, current national 6 month CD rate is 0.58% compared to over 5% in 2007.

I've done a little research, and the average 6 month CD rate of several online bank is 0.96%. (ING Direct, Everbank, ZionsDirect). Admittedly, this is a self selected list, and these are online accounts, which may not appeal to retirees.

Of course, with both Emigrant Direct and ING having savings rates at 1.2%, locking your money up for an additional 0.18% may not be worth it. On top of that, Emigrant's Dollar Savings Direct is currently yielding 1.50%.

I've done some additional research, and found that Everbank is offering 5 year CD's at 3.45% (although they have an 8.5% early withdrawal penalty).

I've used ING and ZionsDirect in the past. CD's at Zionsdirect are auction based, which may turn off some people (they also had the lowest rate of the three banks).

I've yet to use Everbank, although their world currency CD's have intrigued me for a few years.

Savings bonds are another option - I Bonds are currently yielding about 3.36%, although this amount changes over time with the level of inflation. You're also limited to $5,000 a year in purchases
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