DVM gone riding
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Post by DVM gone riding on Jun 2, 2011 22:46:48 GMT -5
Today I got a notice that my ING interest rate is going UP. That is the first time that has happened in the two years I have had the account. Does this mean inflation is coming? Have we truly hit a bottom? Or did something I have no idea about in the fed change recently?
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❤ mollymouser ❤
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Post by ❤ mollymouser ❤ on Jun 3, 2011 0:10:35 GMT -5
How much is it going up ?
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DVM gone riding
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Post by DVM gone riding on Jun 3, 2011 0:45:24 GMT -5
Not much it went from 1 to 1.1 but I checked it has dropped about every three to six months for the last two/three years (can't remember exactly how long i had that account now)
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Colleenz
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Post by Colleenz on Jun 3, 2011 7:22:10 GMT -5
I don't see anything going up. I have a CD maturing and the best 12 month rate I can find is 1.2%.
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steph08
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Post by steph08 on Jun 3, 2011 7:37:56 GMT -5
Woohoo! I have had ING for four years and it has continually dropped since I joined. When I joined, it was up near 5%!
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garion2003
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Post by garion2003 on Jun 3, 2011 8:05:21 GMT -5
I joined ING a few years ago too, and it was at 4% and yes, it has dropped continually since then too!
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Deleted
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Post by Deleted on Jun 3, 2011 9:22:42 GMT -5
I checked my ING account, and the interest rate on savings is still 1%. I have INGdirect, if that's somehow different.
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DVM gone riding
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Post by DVM gone riding on Jun 3, 2011 9:48:00 GMT -5
mine hasn't changed yet, I just got the email notice that it was going to and got on to see if it was going up (the email doesn't say) and it was!! which since it hasn't done that in the amount of time most of us can recall I was amazed!
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Deleted
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Post by Deleted on Jun 3, 2011 15:49:11 GMT -5
What ever will you do with such a windfall!
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thyme4change
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Post by thyme4change on Jun 3, 2011 16:53:26 GMT -5
I can't wait for rates to go up. My house is locked in at 4% - fixed! My car is locked in at .9% - fixed. And my husband's student loans are locked in at 2.5% - fixed.
Bring it!
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ontrack
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Post by ontrack on Jun 3, 2011 16:56:30 GMT -5
I for one am not eager for rates to go up soon. I am throwing money at a $37K private SL with a current rate of 2.8% (variable). I can't refinance it to a fixed rate, so am hoping it's paid off before rates go up seriously (current payoff is in about 7 years).
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❤ mollymouser ❤
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Post by ❤ mollymouser ❤ on Jun 4, 2011 0:40:50 GMT -5
What ever will you do with such a windfall!
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schildi
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Post by schildi on Jun 4, 2011 1:05:57 GMT -5
I can't wait for rates to go up. My house is locked in at 4% - fixed! My car is locked in at .9% - fixed. And my husband's student loans are locked in at 2.5% - fixed. Bring it! Our adjustable rate mortgage has worked fine for us. By the time the rate goes up it should be paid off, thanks to the low adjustable rate (under 4% since 2003, 2.75% right now). Don't have a car loan or student loan, never really had any of those. But I agree, a little increase in rates would be fine. As we just found out, ING's rate is going through the roof!
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Gardening Grandma
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Post by Gardening Grandma on Jun 4, 2011 8:54:21 GMT -5
I would love to see a 4 or 5% interest rate, that won't kill anyone. It will sure help retirees if they have managed to save any of their nest egg the last 8 or so years to have some income again. We will be retiring in the next 2 or 3 years and would LOVE to have CD interest. One of the reasons we bought rentals was because otherwise we would have no income. Crossing my fingers for sure. I dislike the current rates as much as anyone, but history tells us that higher interest rates = higher inflation. Intrest rates of 4 to 5% won't help anyone if they are accompanied of inflation rates of 7 or 8%. Thinking you can have one without the other is wishful thinking. ETA We are getting 4 to 5 % on some of our bond mutual funds.
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IPAfan
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Post by IPAfan on Jun 4, 2011 10:24:54 GMT -5
I can't wait for rates to go up. My house is locked in at 4% - fixed! My car is locked in at .9% - fixed. And my husband's student loans are locked in at 2.5% - fixed. Bring it! What will you do when your house price plummets because interest rates are going higher, and americans buy house on payment rather than price?
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Gardening Grandma
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Post by Gardening Grandma on Jun 4, 2011 18:36:37 GMT -5
I dislike the current rates as much as anyone, but history tells us that higher interest rates = higher inflation. Intrest rates of 4 to 5% won't help anyone if they are accompanied of inflation rates of 7 or 8%. Thinking you can have one without the other is wishful thinking.
You have the relationship between interest rates and inflation backwards. Inflation comes first. Interest rates are then increased in an attempt to drain excess liquidity from the system and reduce demand for goods and services by making less credit available to buy them. Should interest rates rise, your 4-5% bond yields may become 20% losses. Worst hit will be those bonds with longer durations. Duration roughly equals time to maturity plus frequency of interest payment with those bonds maturing later or with fewer interest disbursements, i.e. zero coupon bonds, affected worse. Consider selling now if you believe higher interest to be in the offing. TT, I didn't meant to imply that I thought that inflation was a result of higher interest rates, but rather that we don't have one without the other. As much as I'd like to get more interest on safe investments like CD's or savings bonds, I understand that higher interest rates come at a price. Higher inflation. I do fear high inflation. I remember, vividly, the inflation of the 80's. No way do I want to go through that again. It would be even worse for me now, as a retiree. As far as the price of bonds, I'm actually more concerned with yield. If the price drops, then wouldn't yields have to rise? If I don't sell and enjoy higher yields, then what is my problem? Isn't it kinda like selling your house? If you don't intend to sell, why do you care what the short term valuation is?
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gobermitcheese
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Post by gobermitcheese on Jun 4, 2011 21:33:10 GMT -5
I have an IND account and did not get this email and their site says 1% effective 2/23/2011. It would be nice if they did go up but I have no seen this yet.
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Gardening Grandma
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Post by Gardening Grandma on Jun 5, 2011 12:53:37 GMT -5
You want to look at total return. Yield is meaningless for this type of investment.
Certainly total return is important, but it's the monthly or quarterly yield that goes towards paying my bills. I can't pay the gas bill with total return.
Do not compare a managed bond fund to a house
Why not? We have a rental house. According to Zillow, it has gone down in value since 2005. So the value (on paper) has decreased. Yet every month we receive the same rent check (yield).
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