Only yesterday, HSBC Direct lowered the interest rate offered on the bank’s online savings account from 3.25% to 3.0% APY. Today, following suit, FNBO Direct lowered its rate from 3.5% to 3.25%. These drops are now expected with the Federal Reserve lowering interest rates and the London interbank offered rate (Libor) decreasing.
It’s increasingly hard to find good outlets for short-term cash. The tax-exempt money market fund I invested in three weeks ago, VNJXX, has seen its annual yield drop 2.5 percentage points from 4.83% to 2.36% in that same time.
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{ 3 comments… read them below or add one }
Well at least the credit markets show signs of thawing and hopefully companies will get loans instead of resorting to laying people off.
Any chance they will lower the interest rate they charge on thier credit cards as well.
I just opened an Ultimate Savings Account with Citibank, which is offering 3.5%. Now that ING has lowered its rates, and Vanguard’s tax-exempt money market funds’ yields are below 3% again and dropping, I am moving most of my cash to Citi.