Gould Asset Management is pleased to announce the launch of a bi-monthly column in the Claremont Courier. Our “MONEY and INVE$TING” column will provide insights into matters of finance and investing, with that unique “Gould” perspective and wisdom our clients have grown to know and value.
Our first column, titled “Negative interest rates – say what?,” highlights the abysmally low interest rates currently offered in most US bank savings accounts, while also discussing the negative interest rates currently prevalent in many international bond markets. An excerpt has been included below, as well as a link to the full article on the Courier’s website. We hope you find our column an enjoyable read and learn a little something in the process!
Negative interest rates—say what?
Money & Investing by Don Gould
If you’ve perused a bank statement recently, you’ve probably noticed the near disappearance of any interest income on your savings.
On a quick visit to the Chase Bank branch on Indian Hill Boulevard, we learn that the bank currently pays an interest rate on liquid savings accounts of between 0.01% and 0.09%. With the magic of compound interest, at 0.01% your money will double in just 6,932 years.
And yet, it could be worse. In many parts of the world, interest rates are negative, that is, less than zero. It’s hard to wrap one’s head around the concept, but a negative interest rate does indeed mean that, for example, depositor Sally pays her bank to hold her money.