Interest rates are dependent on supply and demand - when economic growth is high, demand for money is high, so interest rates are pushed up. Government borrowing and fiscal deficit also affect interest rates- since the government is the biggest borrower in the debt market, the level of borrowing also determines the interest rates.

Joker wrote: I am afraid that the interest rate will go up and not just on savings accounts. This will exclude many from homes they want or need and I really dread that fact. In the past it has never stayed low and I really don't expect it now. Be careful is the best advice I can give you.

If interest rates are raised, they will be raised for everything including savings rates, CD rates, and interest rates on credit cards, mortgages etc. Both good and bad for every consumer.

I am afraid that the interest rate will go up and not just on savings accounts. This will exclude many from homes they want or need and I really dread that fact. In the past it has never stayed low and I really don't expect it now. Be careful is the best advice I can give you.

FrugalFran wrote: What do you consider to be a good return on CDs, Frank? I'm just curious because I was considering buying one or two, but the rates I have been seeing look pitiful to me. Am I expecting too much?

Well, to me its relative to what return I can get elsewhere. A 1-3% return isn't worth it to me b/c the majority of my investment horizon is so long term (30+ years). If you want 100% security/no risk/ and need the money in the near term (1-3 years), A CD is a viable and great option. Just for me, I would need 5-6% plus return.

What do you consider to be a good return on CDs, Frank? I'm just curious because I was considering buying one or two, but the rates I have been seeing look pitiful to me. Am I expecting too much?

I would expect 2-3 interest rate rises this year, but they will still be small. I don't think you will really get a good return on a CD until 2019 and on. That is assuming the economy holds up and continues to grow.

I'm afraid raising the rate will also trigger an enormous rise in inflation. I'm not convinced that higher rates will make much of a difference to the savers in that case, but it will likely the debtors to spiral down.

How much longer do you have to wait until your CD matures, Lexie? I'm with you on the frustration of seeing very little return on investments that were a sure way to pad retirement in the past.

Moneyes wrote: Well, Trump is currently proposing some of the biggest tax cuts in history. If what he wants to do gets approved, those tax cuts could serve as a buffer scales should the interest rates rise.

I agree Moneyeyes. Predictions are the interest rates will rise beginning this summer. Gold and silver are dropping and the stock market is holding it's own. I surely hope to see an increase on my bank statements soon.

I hope we do see some interest rates increase this year!

Well, Trump is currently proposing some of the biggest tax cuts in history. If what he wants to do gets approved, those tax cuts could serve as a buffer scales should the interest rates rise.

I'm rather nervous about interest rate rises. With so much credit card debit and mortgage debt in the market at the moment, I'm worried a large rise would cause another crash, and that wouldn't be good for anyone. Right now I'm not keeping much in bank savings if I can avoid it, as it just doesn't earn much.

Rates are going up, just slowly. FED just raised rates a few weeks ago. Many are predicting 2-4 raise rates this year. Over the next 3 years we should see steady increases.

I totally agree Moneyes. I am keeping a certain amount in savings but have been exploring other avenues to make money. A couple of pieces of property here, a few shares of stock there. We'll see which one pays the greater yield.

i stopped waiting for this to happen a long time ago. II think people still do it just out of habit, and they don't know where else to turn to make their money grow more.

Share your sentiments exactly. Remember a time when the Federal Government set a minimum savings account rate at 5.25%. Sure isn't there today. Likely the banks will be dragged back to a little more in the savings rate but they are not going to rush themselves as the Federal Reserve raise the interest rates.