Interest rates on savings accounts still falling

Nowadays, it has become tougher for Americans to find which banks they should really go for especially when it comes to opening a business savings account. According to surveys, consumers and business people are trying hard to find a bank where they don’t have to pay more just to have their money protected.

Economy had still been a little down for the past months. The average rate on business savings accounts have actually dropped to 0.99% in July of this year, 2010. it is the first time in a decade where the rate dropped to lesser than one percent. With this, banks are raising the cost of existing fees and are actually having new additional fees to answer the changes in banking bills that has took effect as a law in July, 21, 2010.

While a lot of companies actually want to open a business savings account, they are getting skeptic because as how they see it, the earnings of their savings deposit would only go to charges and that is something any businessman wouldn’t want.

The low rates on Fed have allowed business and savings account in the US to reduce their costs of deposit. Just in the first quarter of 2010, banks have paid an interest amounting to $4.38 billion which is decrease of about 74% compared to the year 2007; a data from SNL Financial in Charlottesville, Virginia.

One more reason for the cutting off of interests in banks is that they have to recover  from the loses that had been incurred due to the federal legislation which limited the overdraft fees which in estimate was around  $15 billion each year. Since 2007’s third quarter, banks had been decreasing their rates. After the bill had been approved into law, there was a sudden and huge drop when it came to new accounts.

According to Moebs Services data, high fees caused or pushed the price per annum of some savings account to $301; that is an increase of 11% for the past five years. 

Most banks will now be charging savers a monthly maintenance fee and charges also apply for payments which had been expedited. With the decrease in rates, a lot of people still believe that opening a business account still is a better option. Business savings account is one way to improve a business portfolio. Experts have also suggested that businessmen considering of opening business savings account should apply online.