Jan 11 2009
Interest rates are nearly zero, is it still worth saving?
The short answer is Yes. Interest rates have been slashed to help existing borrowers who are on adjustible rate or variable rate mortgages. And of course to help business borrow more cheaply.
But just because the returns on savings are extremely low, doesn’t mean that this is the time to stop saving. We don’t know how bad things will get before they recover, and it’s always nice to have money in the bank just in case.
Also remember that the economy won’t be in the doldrums forever. Interest rates will rise again. So save away. In addition note that in the downturn, some assets become very cheap because no one except cash buyers can afford them. Of course if you have been saving determindly, you will have the cash available to buy, whether it is buying shares or perhaps a home that you’ve always wanted at a knock-down price.
