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Americans have been experiencing a low interest rate environment, which is intended to stimulate economic growth. But this can be problematic for investors who want to see returns on their money, even when in a safe account. Independent retirement planner Thomas Reilly of Strategic Wealth Designers joined us on the newscast to discuss low interest rates.
“Low interest rate environments occur when the risk-free rate is lower than the historical average,” Reilly says. “The Federal Reserve, or the Fed, lowers the interest rate to stimulate economic growth during economic decline. Typically, this benefits borrowers and hurts lenders and savers.”
If interest rates returned to a more average level, rates of return may be improved for those looking to keep money in traditional savings accounts. US Treasury Secretary says both Americans and the Fed could benefit from a higher interest rate. The country has been experiencing relatively low interest rates for a decade.
“Even in a low interest rate environment, you want your emergency fund to be both safe and easily accessible,” Reilly says. “You may want to consider options such as online banks or higher yield checking accounts. These usually offer better returns than traditional banks and could be an alternative to a CD or savings account.”
Using an alternative low-risk account may show better returns in a low interest rate environment. To see additional stories surrounding business and economic news for Denver area, visit https://KDVR.com/Money and if you have a question for Thomas send an email to firstname.lastname@example.org.