It’s come to this: The biggest banks are paying nothing for our savings.
Or at least nothing for the money we put in our savings accounts.
Here’s the return the four largest banks are now offering on their regular savings accounts:
Bank of America: 0.10% on all balances
Wells Fargo: 0.05% on balances up to $25,000
Citi: 0.25% with a $500 minimum balance
JPMorgan Chase: 0.01% all balances
For all practical purposes, that’s zero. Nada. Nothing more than pennies for your hard-earned savings.
Unfortunately, this is the entirely predictable result of the Federal Reserve’s campaign to shower commercial banks with all the free money they could possibly want. (It does that by charging them 0.0% to 0.25% for short term loans.)
The policy made sense when the banking industry on the verge of a calamitous collapse that would have plunged the world into another Great Depression.
It guaranteed a great yield spread between what banks paid for money (including deposits) and what they charged for loans.
And let’s be clear. The Obama administration and Federal Reserve have been willing to do almost anything over the past year to help the banking industry.
They’ve certainly done far more for the banks than they’ve done for the typical family coping with the economic fallout from the financial crisis caused by all of the banks’ irresponsible lending.
What Obama and Federal Reserve Chairman Ben Bernanke clearly didn’t anticipate was the industry’s ungrateful response and the public backlash those arrogant bankers have unleashed.
This policy requires millions of us to sacrifice even a modest return for our hard-earned savings to help a banking industry that slaps us in the face at every opportunity.
The banks won’t help us save our homes from foreclosure by modifying our mortgages. They relentlessly raise the rates on our credit cards to unconscionable heights, cut our credit limits and impose all sorts of fees and penalties if we’re a second late with a payment.
Whatever public support existed for bailing out the banks has been squandered and Obama is going to pay a fearful political price if he and Bernanke continue on the current course.
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