xmlns:og='http://ogp.me/ns#' The Font of Noelage: It's about money, so everyone has an interest.

Saturday, 15 December 2012

It's about money, so everyone has an interest.

The Reserve bank recently lowered interest rates by .25 per cent. 
For many people this was very good news. It was especially welcome news for anyone paying off a mortgage.
However, the media, being the media, have a vested interest (no pun intended) in bad news and many commentators focussed on the bad news by saying that low interest rates will have a negative effect  on self funded retirees.
These professional opinionists, who are well paid for their comments, said that lower interest rates are actually very bad news for people whose income is dependent on the  interest paid on their savings.
However, for those interested in facts, instead of the perceived grievances of some media pundits, perhaps we could reflect upon the fact that bank interest rates on savings deposits are higher now than they were before the Global Financial Crisis struck in 2008.
The simple fact is that the Reserve Bank’s recent actions in lowering  interest rates on lending has had very little impact on bank interest rates on savings deposits.
The happy fact is that, just at present, our banks are very keen for people to deposit their money and earn some interest.There are a lot of "interesting" saving and investment schemes on the go. Just check out your letter box for a friendly letter from your local bank manager, telling you of the wonderful savings investment packages that are available.
And for any self funded retirees who would rather speculate than accumulate, the stock market and the real estate markets (especially rentals) are all trending upwards.
Gloomy people will have to look somewhere else for their bad news. I have no doubt that they will find it.
Maybe those gloomy media gurus, who see low interest rates as a burden on the rich, can take heart from the fact that we have a Labor government in charge of the Treasury, because, as John Howard once said, "Interest rates will always be lower under a Coalition government." 
Lower than 3%. Wow!

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