3 Ways to Earn from Plummeting Rates
Most of our investments are down, due to plunge in economy and fall in savings interest rates. However, there are some ways to earn more from falling rates, apart from liquidating your investments and stashing cash at home. Let’s have a closer look at few of them.
Weaker Euro
The Euro has become cheaper due to wavering financial stability in the European countries. It has gown down to $1.29 from $1.51 in past few months, and it is expected to stay low for another 3-6 months.
The Strategy:
Everyone from investor to street-side shopper can earn from the weakening euro. Many big European retailers have managed to keep prices equal worldwide. However, savings can be done by purchasing things from direct importers. If you have an import business, this is probably the best time to stash some non-perishable commodities. Besides, European stocks too have seen a sharp fall in recent months. Investing in some of them now can be a bargain for most investors.
Low Interest Mortgages
Mortgage rates have fallen considerably, and they have reached record-lows this year. You wouldn’t be able to see such fall in rates in your life times, Keith Gumbinger, an HSH Associate, believes.
The Strategy:
If you have been making payments on mortgage since many years, get a 20-year fixed loan. Interest rates are way lower than what you would usually pay for a 30-year loan. However, you will save a considerable amount of money on interest. If you are planning to get a new loan to benefit from lower interest rates, you will have to hurry up. This is because rates surge quicker than they plunge, and it would take at least 60 days to process your loan. So, don’t delay; send your loan application at the earliest.
Savings Rate
Savings rates too have been very low in past few years. During Feb 2010, it was 0.02%, and it gas now increased to 0.03%, which can hardly be termed as budge. It’s futile to expect any relief as most believe the Fed would raise rates only after mid-2011, or in 2012.
The Strategy:
Not all banks provide lower rates. If you want to avail better returns on your savings, you can deposit your money in online savings account of Sallie Mae Bank, which pays interest rate of 1.4%. So, if you deposit $50,000, you get $685 as yearly returns. However, it will take around 2-3 days to withdraw money from you online account.
