Interest Rates Are Going Up. What Do You Do?
By Anthony Rivieccio, MBA, PFA
Will they or won’t they? Last week, interest-rate watchers and the investing public saw The Fed say, “No change.” Well, at least, for the next 30 days.
But all indications show that Chairwoman Janet Yellen and The Fed want to move interest rates up as soon as they can. Why? Because Yellen wants to tame inflation while giving the economy the room to try to grow some more.
While I hope that’s not true, the fact is I have no vote.
My best guest is that The Fed is going to move interest rates up — slowly. But up.
So, what should you be doing with your money?
1) Consider a Savings Bank — But shop around first!
Bank savers should go shop around to find interest rate comparisons between credit unions and savings banks. It will take a while to maximize but early shopping for higher rates should start now. Rising interest rates, through banks, is likely to be slower.
The first thing to remember is that we’re only talking about one-quarter of one percent. Depository institutions will likewise incorporate those interest rate adjustments into their savings products at a very gradual pace.
2) Time for credit card consolidation
Borrowers of shorter-term credit, such as credit cards, will see the greatest immediate impact from a Fed rate hike. Longer-term rates will not be impacted as quickly. A rate hike is not likely to have much of an impact on mortgage rates, for example. So for borrowers, the old adage of paying off those borrowings with the highest interest rates first becomes even more important.
3) Speak with a Financial Investment Advisor
Have investments? Have a 401k or Retirement plan at work? ” Generally speaking, higher interest yields make investments more risky. Sit with an expert now!
Anthony Rivieccio is the founder & the CEO of The Financial Advisors Group, celebrating its 20th yearasafee-only financial planning firm specializing in solving financial problems. Anthony, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News12 The Bronx, Bloomberg News Radio, Bronxnet, The Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News and The Bronx Chronicle.
For financial assistance or a FREE 2016 Investment Analysis. Anthony can be reached at (347) 575 5045.