Cash-Rich Banks Pay Nothing on Deposits, But You Can Fight Back [View All]

[bloomington-lib]

Source: abc

Banks have so much cash on hand and interest rates on deposits are so low that in some cases, you'd be ahead of the game if you stored your money in a mattress.

According to Bankrate.com, the national average on 1-year CDs is 0.36 percent. That's right, about one-third of a percent annually, or just $4 in interest on a $1,000 deposit at the end of a year. Money market checking accounts? Forget it, at the 0.10 percent typically paid, you'll have a buck to show for your $1,000 deposit.

The fact is, many banks really don't want your money. Consumers and businesses have moved money out of the falling stock and bond markets and parked it in bank accounts. In response, some banks are even passing along the cost of federal deposit insurance and imposing fees on accounts where piles of cash are moving in and out too much. The result is that you might pay the bank for the privilege of keeping your cash there.

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"We just don't need it anymore," said Don Sturm, the owner of American National Bank and Premier Bank, told the New York Times. "If you had more money than you knew what to do with, would you want more?"

Read more: http://abcnews.go.com/Business/banks-pay-interest-cds-invest/story?id=14812925