Long Term Impact of 1% CDs
Albert Einstein is supposed to have remarked that a force in nature even stronger than gravity is the power of compound interest.
His words are never more true as we watch the prolonged results of earning what can only be described as chronically paltry CD interest rates. Since the crash of 2008, bank savings rates have tumbled down and have not gotten back up. A one year bank CD pays about 1% interest.
If you are willing to go longer and lock your money up for five years, the national average annual rate is about 1.7%. If you are looking at a bank money market or savings account, you will probably have to count the zeros to the right of the decimal point to figure out how close your rate is to nothing.