When Will Interest Rates Increase?

Written by admin on August 10, 2009 – 10:37 am

For some low interest rates are good. Like when you seeking a mortgage, but for others (like me) low interest rates are the kiss of death. Experts are all over the place when asked the question “when will interest rates increase“? On the bright side, some say, Yes. Others predict an increase in the early part of 2010. Why do people want interest rates to increase? Some of us live on interest income. What is interest income? Interest income is a type of income generated from your investments usually from a bank. Interest income can come from bank deposits, bonds, and treasury bills. Bank deposits includes saving accounts, money market accounts, CDs, and sometimes checking account. When the feds lower interest rates, banks usually lower interest rates it pays out to account holders. Therefore when the feds raise interest rates, banks usually raise interest rates it pays out to account holders.

Please Increase Interest Rates

Back in 2007 and early part of 2008 I was earning nearly $600 per month in interest income. Now, with interest rates so lower I’m barley making $300 per month. The only reason why I have managed to save 1/2 my interest income is from moving money all over the place. I have learned alot in the process. Instead of just bumping a bunch of money in a money market account, I am now investing in CDs with at the moment are offering better interest rates. Now, that I understand other investment products I’m looking forward to the increase of interest rates. I’m sure I will surpass $600 per/month.

Predictions for the Predictors on the Increase of Interest Rates

I don’t know how true are accurate these numbers are because experts seem to flip-flop on their own numbers. However, I have seen predictions that interest rates will increase by October 2009. How much? Your guess is as good as any one’s else. Below is a graph of interest rate movement from Feb 07 thur Jul 09 (the graph is on 6 mo CDs).

Six Month Certificate of Deposit Interest Rate
6 mo CDs interest rates