Friday, March 7, 2008

Watch your step: savings account rates falling

Tuesday's rate cut by the Bank of Canada has already led to a 0.50% drop in bank prime rate, and now it's being reflected in online banks' savings account rates. As of today, ING Direct and Canadian Tire Financial Services have rates of 3.30% and 3.75%, respectively. HSBC Direct is holding at 3.70%, and ICICI Bank is still at 4.10%.

This makes HSBC's rate promotion a little more attractive, except for the fact that the promotion is so brief: the 4.75% promotional rate on new deposits only lasts until May 2.

It looks like we're in for some tough sledding ahead; my consolation is that, with more revolving debt than liquid savings, I still benefit from falling interest rates. I wonder how this will play out over the next couple of years.

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