July 6, 2006
Albany - - Today, the Federal Reseve raised interest rates to the highest point in more than five years. It's the 17th hike since 2004, and another bump in rates may be on the way next month.
What are you doing with your money these days?
"Trying to hold on to it. Trying to save," says Paula Rogers.
Many other people are trying to do the same thing.
"The rates are about as good as they've been in quite some time," says Sun Trust Bank Vice President Joe Vanden Bosch.
Today the federal government raised the interest rate again, this time to 5.2 % Sounds like bad news? It may be for some.
"If you're the type of individual that likes to borrow money, it may cost you a little more to use that credit card in your wallet or if you're looking to purchase an automobile and you want to get an auto loan, the rate may jump up a little bit," Vanden Bosch says.
But there's good news too.
"When the federal government decides to raise rates you typically earn a little more money that you have either in savings, money market, or certificate of deposit."
Meaning now is a good time to invest in a money market or a c.d. because the intrest on it will probably bring a greater return. But you have to back off that credit card and do what Ashley Kenny is doing.
"Saving my money trying to purchase a vehicle...I'm depositing money, not withdrawing," Kenny says.
In a certificate of deposit, you can deposit money for a fixed term for a fixed rate and receive money from interest. In a money market, there's no fixed rate. So your interest can go up or down, but you can withraw money from this kind of account anytime.
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