Make us your home page
Instagram
Money questions

Savers fret lower interest rates

We asked: Are lower interest rates good or bad for you and the economy?

Lower interest rates have a depressing effect on retirees who depend heavily on interest income from their investments. A reduction of 2 percent in the interest rate can mean a loss of thousands of dollars in annual income, thus cutting down on travel, discretionary purchases, including entertainment, thus putting a dent in the retail
economy.

Eric Rhodes, New Port Richey

Lower interest rates are bad
for me, personally, but good for businesses making capital expenditures, students seeking college financing and home
buyers and sellers.

Lindsay Myers, St. Petersburg

I am no longer getting top dollar for my invested bucks. As a result, I am more guarded as to how I spend my money, which isn't helping stimulate the economy.

JoAnn Lee Frank, Clearwater

Lower interest rates are good for us. We have a home-equity line of credit at prime rate, and it has dropped 2.25 points since last year, meaning more than $20 per $1,000 saved in interest per year.

Lamar Sprouse, Weeki Wachee

Lower rates are helpful to stimulate this sluggish economy. I have no debt, so the impact of lower interest rates on my personal finances is probably much less than average.

Adrian Nenu, St. Petersburg

You asked

Our H savings bonds reach final maturity in July. There is a taxable interest amount shown on the face of each bond. How is this reported to the IRS? Must the bonds be redeemed at one time?

The deferred interest
shown on your bonds is
taxable when the bonds are redeemed or they reach maturity, whichever comes first. Delaying redemption would mean you would not be earning any interest on the money but you would owe the taxes.
You report the deferred
interest on your 2008 tax return.

Since the Fed seems intent on sucking the life out of
my savings by lowering interest rates to zero, at what point is it not worth the risk to let a bank have it? It seems that at 1 percent interest, banks are likely to get a run on the money. So shouldn't I transfer funds into a safe storage location, such as a safe deposit
box for the short term?

I don't see it ever being worthwhile to keep cash in a safe deposit box. Keep your money in a well-capitalized bank or credit union and keep it within deposit insurance limits.

I don't think the government is going to back away from deposit insurance, and a safe deposit box isn't going to protect you from inflation or the decline in the value of the dollar.

Next week's question

How high do gas prices have to go before you'll
cut back on your driving?
Or have you?

To ask a question, make a comment or answer the Money Question of Week, e-mail hhuntley@sptimes.com or write Helen Huntley, PO Box 1121, St. Petersburg, FL 33731. Visit her MoneyTalk blog (blogs.tampabay.com/money) for more money information.

Savers fret lower interest rates 03/22/08 [Last modified: Monday, March 24, 2008 2:24pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Marina at Hudson Beach poised to become 24-unit condominium-hotel

    Business

    HUDSON — One of the mainstay businesses at Hudson Beach is poised for redevelopment into a 24-unit condominium-hotel.

  2. Have your say Tampa Bay on the region's future transit options

    Mass Transit

    TAMPA — It's time, yet again, for Tampa Bay residents to tell officials what kind of transit options they want for their region.

    The Cross-Bay Ferry docks at the Tampa Convention Center on its maiden voyage on Nov. 1, 2016. A regional premium transit study will determine whether a ferry, or other options such as express buses or light rail, would be a good addition to Tampa Bay. [SCOTT KEELER  |  Times]
  3. SOCom seeks civilian drone pilots to develop new technology through ThunderDrone

    Macdill

    TAMPA — For the last three years, Nicole Abbett has been using drones as part of her photography business, with clients like the city of Tampa and construction companies.

    Josh Newby, 31, Palm Harbor, of Tampa Drones fly's a drone in England Brothers park, Pinellas Park, 8/25/16. As drone popularity increases as a hobby and business, local governments are navigating a legal grey area- where, when, and how should drone flights be allowed?
  4. New apartment complex delivers unique floor plans



    Business

    RIVERVIEW — A new luxury apartment community has opened in the Progress Village area touting itself as a distinct living option just 10 miles from downtown Tampa.

    Alta at Magnolia Park dubs its new apartment community, that opened earlier this year in Riverview, a modern and distinct option for living just 10 miles from downtown Tampa.
  5. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]