Released: August 22, 2007

Consumers don’t heed savings interest rates

Source: Andrea Coombes, MarketWatch

Sixty percent of consumers surveyed in May said they “almost never” check the interest rates available on savings accounts, even though most respondents pointed to rates as a top concern for them, according to an online survey of about 5,800 U.S. households conducted for HSBC… Consumers may have more reason to shop rates soon: Some economists predict the U.S. Federal Reserve Bank will lower the federal funds rate to calm the volatile financial markets. The prime rate - a rate that’s tied to many consumer financial products - generally moves in step with the federal funds rate.

A decline in the federal funds rate could lead to a drop in the rates offered on savings accounts. On the other hand, a lower federal funds rate can also mean lower credit-card and other loan rates.

Just 15% of the consumers surveyed said they earn more than 5% on their money market account and 29% say they earn more than 5% on their online savings account, according to the survey.

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