Losing My Interest
March 31, 2009 | Filed under Money
Failing economy. Credit crunch. Interest rates. Job loss. Unemployment. Recession. Depression.
While we’ve been living in these uncertain economic times for six months now (I date it from the September 2008 crashes), I didn’t feel the effects personally until I lost my job when the shop I worked in closed in late January. I spent two months unemployed while searching desperately for part-time work that would allow time for me to continue my postgraduate studies – a harrowing two months that really took a mental and emotional strain on me. I can’t even begin to imagine the strain unemployment would have on people struggling to support their families when I was constantly in a pit of despair despite the fact that I only had to worry about myself!
I have a job now, but what I’m now concerned about are interest rates, and its effects on my savings. The lower interest rates in Australia now are great for home owners with mortgages as they have less to pay off each month; but they’re terrible for those of us with no debts, and large savings. The below is a screencap of the activity in my serious saver account (the descendant of my term deposit account, not my normal everyday bank account!) for the past three months:
Note that I don’t touch this account at all – it exists merely for me to accumulate interest on the amount sitting in the account. In a healthy economy, the interest earned should increase each month when the balance rolls over as a result of compound interest. However in today’s economy, the interest is actually decreasing each month despite the increasing amount of money in the account. I’ve gone from earning $60 a month to earning $40 a month – a loss of a third of the original total!
I have to say, this matter of interest rates concerns me a lot more than the plight of the unemployed and those about to default on their mortgages, because it’s more immediately relevant to me. And I call myself a socialist!
3 Responses to Losing My Interest
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How I hate the falling interest rate. But I was lucky because I deposited most of my money into term deposit last year in April, when the interest rate for that was 9%. It has fallen to some 4 or 5% now and it’s maturing soon but at least I got 9% for all the previous months with declining interest rate! Although I could’ve done better by buying USD with all that money and I would’ve gained some 30%. Grrr.
Rilla on March 31, 2009 #
As long as you don’t start LOSING money. :P I’m having the same problem with my savings account – it’s gaining money but just barely, and slowly. So depressing.
Rebee on April 1, 2009 #
I mentioned this to Rachael the other day. Not long after opening my ISA, with little more than £1k in there, I was earning something like £5+ p/m interest. I now have closer to £5k and I’m earning 97p. Why the fuck are we savers being penalised for the cock-ups of the twats who live beyond their means on credit?
Jem on April 1, 2009 #