I didn’t figure the great rate would last long, but I’m disappointed nonetheless that Dollar Savings Direct has lowered their online savings account interest rate from 4% to 3.5%.

Still a leader in the online savings account game, I can’t be too disappointed; they still beat Emigrant Direct by more than a full point (Emigrant Direct is still sitting at 2.4%), and I pretty much have to pay Bank of America (or is it America’s Bank now?) to hold my money.

I’ll sit and wait for the time being.  My money is FDIC insured, the interest rate is very competitive, and the setup and administration has been trouble free.

Somehow I suspect the rate drops are not done yet, and we’ll continue to see interest rates fall for the next 8 to 12 months.  I hope I’m wrong.

Among the online, high yield savings accounts, there are still a few that pay a respectable rate.

Bank of Internet still has a 3.51% rate with no fees and a $100 minimum deposit.  FDIC insured of course.

Chesapeake Banks Clear Sky Accounts still offers a 3.75% APY, however the interest compounds monthly instead of daily.

Many others are sitting at or below 3%, including HSBC Direct, FNBO Direct, and ING Direct.

Banking Dollar Savings Direct, Emigrant Direct, interest rate, online savings, Saving

Well, by now the 25 basis point rate cut is old news. It’s interesting to see the mixed reaction to the cut; some say it wasn’t enough and that The Street was expecting 50 points, others say that the Fed should quit trying to save the economy from recession and let the free market play out.

A few highlights:

This Fed continues to display their cluelessness. They will definitely have to cut more times, so just GET IT OVER WITH now. Silly Fed. -Jordan, In The Money

What is the right number for interest rates? 4%? 3%? 2%? No one knows for sure, and that’s the problem. Investors are becoming like Pavlov’s dogs, frothing at the mouth at the mere thought of an interest rate cut. Once the Fed accedes to their wishes, they are satisfied for a while but wind up wanting more and more cuts.

As today’s market action shows, these people are never going to be satisfied. -Jonathan Burr, Blogging Stocks

The Corner Office Take

In my opinion, Bernanke should have left the interest rates alone. The Fed doesn’t make an economy, and it can only soften the edges of the peaks and valleys.

My Emigrant Direct account will probably take a hit, and the threat of a recession is growing rapidly, thereby taking the attractiveness out of the stock market.

If you can’t make money at a bank, and you don’t want to throw all your money into the stock market, where shalt thou stash thy cash?

Economics, Finance Fed rate cut, FOMC, interest rate, rates