You’ve arrived on this page in search of the best interest rate/s available to depositors, and that’s exactly what you’ll find.
Within this blog we explore the following:
- Current interest rates being offered by major banks
- An overview of the global interest rate environment
- How rock bottom interest rates and sky-high inflation levels are impacting savers
- Why it’s important to see yourself as a lender
- Thinking about how much cash you should hold in your bank account
- How to access investment banking fixed deposit notes
Interest rates being offered by some of the world’s major banks in 2022
|Best interest rate available
|Bank of China
|1, 3, 6, 9, or 12 months
|1, 3, 6 or 12 months
How rock bottom interest rates and sky-high inflation levels are punishing savers
Modern-day savers cannot rely on the same tools their parents did to grow their wealth. Baby Boomers and Generation X enjoyed a long period of high-interest rates. These peaked in 1981 when the annual average was 16.63%. A high-interest rate environment handsomely rewards savers by producing an attractive annual return but punishes borrowers due to high charges on any loan.
Since 1981 interest rates have steadily declined to their lowest point in modern history. Meanwhile, inflation skyrocketed to 7.5% in December 2021.
Inflation refers to a progressive increase in prices across goods and services. Small amounts of inflation are generally seen as healthy for an economy; higher levels of inflation mean people’s living standards drop, as what they can afford becomes less.
Why it’s important to see yourself as a lender
An interest rate, in its most basic definition, is how much it costs to borrow money. When you deposit money into a bank, they are essentially borrowing money from you. Banks hold billions in account deposits. The bank will then generally hold a portion of this in cash and will invest and lend out the rest. The bank earns huge amounts from these investments and loans; however, they only pay depositors around 0.2% in return.
The impact on your wealth
When a bank account pays around 0.2% in interest, the monetary value grows at a very slow rate.
As an example, $100,000 would grow to $101,004 in five years.
During the same period, with high inflation rates making things increasingly more expensive, a saver is losing the purchasing power of their money each year. The bank account balance will remain constant, but the purchasing power of the bank account will decline steadily.
Savers are therefore posed with a choice, to either accept the steady decline in the purchasing power of their money or to take action to combat the powers of inflation by attempting to grow their wealth.
Holding the right amount of cash in your bank account
As demonstrated, holding your wealth in cash over a long period has a detrimental impact on your wealth. However, it is also important to have sufficient liquidity in your bank account for immediate expenditure and life’s unexpected emergencies. Usually, advisors recommend, clients should seek to hold between three- and six months’ worth of wages in cash. Holding anything more than that amount can be costly, as inflation erodes its real value steadily.
How to access the best fixed-interest options
The deVere Group offers a range of private investment banking fixed income options that are designed to help savers beat inflation and enjoy capital growth. These products, which are only available for deVere clients, yield between 4-25% per annum.
deVere clients who use these products enjoy quarterly, semi-annual or annual interest payments. These are paid into the client’s cash accounts where they can be withdrawn, reinvested or held in cash. The minimum amount for deVere’s investment banking fixed-income products is $10,000.
Please click on this link for more information on private investment banking notes, and here if you want to be part of our exclusive client base who are benefitting from higher rates of interest than a bank would offer to the normal man on the street.