The American dream is rooted in the idea that if you work hard and save your money, it will all pay off in a big way down the road. These days, however, that dream is quickly turning into a nightmare for some.
According to CNN Money, there were rumblings in the financial community that the Federal Reserve, America’s central bank, could finally raise interest rates for savings accounts on Sept. 18.
Unfortunately, that was not the case.
The current interest rate for savings in the Federal Reserve is essentially 0%. It saw a massive plunge during 2008 at the height of America’s worst recession in decades, and savers are clamoring for some sort of increase.
“When you have a bank account with $10,000 to $15,000 and it gets 0% interest, it rubs you the wrong way,” said Dennis Johnson, who is an accountant living in the Miami area.
An estimated 27% of Americans have no savings at all, but for those who do have a decent amount of money tucked away, the idea that banks are thriving while the common man suffers is maddening.
“I look at these banks recording record profits — billions every quarter — and they are so miserly they can’t even pay 0.5% on a high yield account,” said Fiano.
U.S. News notes that Americans who are retired and trying to supplement their Social Security benefits with income from their savings have been forced to take a huge pay cut. It also hurts seniors who might want to buy an annuity or get a reverse mortgage, as they don’t have the means to do so.
The average return on a savings account in the United States is a mere 0.1%, according to Bankrate.com. This is a disturbing decrease from 2006, when savers could expect about a 5% return.
The Federal Reserve still maintains that interest rates will increase by the end of the year — but don’t bank on it.