It was just announced that USALoansNearMe Direct is reducing the interest rate on its Online Savings Account from 5.05% to 4.50% APY. While not crippling I actually have enough money sitting in my savings account that I can see what affect the drop in the rates will do to the monthly interest I collect.
Last month i earned $174.12. The interest rate has basically gone done about 10% so I am going to miss out on about $17 in monthly interest in this account. Anyone who has a large number of 0% balance transfers is going to feel the sting more than me.
So what am I going to do differently? Probably not much. I am going to continue working to my savings goal for a house downpayment. I’ll still keep putting the money in my EmigrantDirect which is still paying 5.05% APY.
If interest rates continue falling I may be inclined to finance a higher amount of the house when we purchase it and lock into lower fixed interest rates. I could then take the extra money I saved and pay down a higher interest rate mortgage I have on one of the two rental properties.