The Impact of the GOP Tax Bill on Savers

[scfr]

From DepositAccounts.com

The Impact of the GOP Tax Bill on Savers

by Sol Nasisi

Ever since the 2008 financial crisis, savers have taken it on the chin with rock bottom interest rates. The Federal Reserve, in an effort to revive the economy, lowered the federal funds rate, deflating returns for savers and creating an almost decade-long spell of near 0% returns on savings and CDs.

Finally, in 2015 as the economy continued to grow, the Fed began to reverse its 0% interest policy and rates began to slowly rise. On Dec.13, the Fed announced the latest of its five rate hikes since 2015, raising the Fed Funds Rate to 1.50%.

Many have analyzed how the GOP tax bill will impact lending, real estate, and small businesses, but scant attention has been paid to savers. The good news for savers is that the GOP tax bill that is currently winding through Congress has the potential to further accelerate the economy, as least in the short-term, and quicken the pace of rate increases over the next year. Although savings and CD rates may not return to the 6% range anytime soon, the GOP tax bill on the whole provides upside potential for savers. ...

[click the following link to continue reading]

https://www.depositaccounts.com/blog/2017/12/impact-gop-tax-bill-savers.html

[Thrif-t]

Well I certainly hope so!

As a parent, it's been quite a struggle to get the kids to see the value in depositing money into their savings account. That whole compound interest thing goes right out the window, when they see on their statement they're only getting $0.32 a month

[disneysteve]

As a parent, it's been quite a struggle to get the kids to see the value in depositing money into their savings account. That whole compound interest thing goes right out the window, when they see on their statement they're only getting $0.32 a month

I don’t know how old your kids are or if you’d be able to do thsomething s but the way I taught our daughter the value of compound interest was by setting up the “Bank of Dad”. She opened her “account” there and I paid her 5% interest per month. That way she got to see the money actually grow at a noticeable rate.

[bjl584]

We shall see, but it seems like the Fed is busy slowly raising rates anyway despite any tax policy.

The new tax code might boost the economy, but again, we'll have to wait and see how it plays out over the next couple of years.

[bjsint]

As far as I have read experts seem to think any improvement in the economy will be negligible and short lived and the slight growth won't make up for the loss of revenue to the government... hence the massive deficit increase.

The GOP have already signaled cutting programs that help the poor in order to 'fix' the deficit. This will further hurt the economy. If poor/middle class have less money to spend the velocity of money slows down... and companies start cutting jobs.

Carrier - which Trump touted as a company his plan helped save jobs for, has just announced massive firings, even after the big tax break they just got given.

My personal taxes will be reduced a little this year which is great, but long term I think I don't think the GOP tax plan will benefit the majority of Americans. We shall see, fingers cross it's better than I and most experts expect

[FindingFreedom]

I was pleasantly surprised when my husband's company gave all of its employees a $1,000 bonus plus increased their 401(k) match by 1%. They cited their corporate tax cuts as the reason. Only time will tell if it's a good bill in the end but it did come with a nice payout for us.