How can a 'saver' maintain or increase wealth in low interest rate economy?
"Since the other answers have covered mutual funds/ETFs/stocks/combination, some other alternatives I like - though like everything else, they involve risk: Example of how these other ""saving methods"" can be quite effective: about ten years ago, I bought a 25lb bag of quinoa at $19 a bag.  At the same company, quinoa is now over $132 for a 25lb bag (590%+ increase vs. the S&P 500s 73%+ increase over the same time period).  Who knows what it will cost in ten years.  Either way, working directly with the farmers, or planting it myself, may become even cheaper in the future, plus learning how to keep and store the seeds for the next season." Personally, I invest in mutual funds.  Quite a bit in index funds, some in capital growth & international. "I think this is a good question with no single right answer.  For a conservative investor, possible responses to low rates would be: Probably the best response is somewhere in the middle: consider riskier investments for a part of your portfolio, but still hold on to some cash, and in any case do not expect great results in a bad economy. For a more detailed analysis, let's consider the three main asset classes of cash, bonds, and stocks, and how they might preform in a low-interest-rate environment. (By ""stocks"" I really mean mutual funds that invest in a diversified mixture of stocks, rather than individual stocks, which would be even riskier.  You can use mutual funds for bonds too, although diversification is not important for government bonds.) Cash. Advantages: Safe in the short term.  Available on short notice for emergencies. Disadvantages: Low returns, and possibly inflation (although you retain the flexibility to move to other investments if inflation increases.) Bonds. Advantages: Somewhat higher returns than cash.  Disadvantages: Returns are still rather low, and more vulnerable to inflation.  Also the market price will drop temporarily if rates rise. Stocks. Advantages: Better at preserving your purchasing power against inflation in the long term (20 years or more, say.)  Returns are likely to be higher than stocks or bonds on average.  Disadvantages:  Price can fluctuate a lot in the short-to-medium term.  Also, expected returns are still less than they would be in better economic times. Although the low rates may change the question a little, the most important thing for an investor is still to be familiar with these basic asset classes.  Note that the best risk-adjusted reward might be attained by some mixture of the three."
There is a clear relationship between dirty or low maintained office carpets and allergens and dust mites, which can increase the incidence of bacteria and germs leading to work related absence due to the spread of coughs and colds in the office.  Identify how a cleaner looking carpet can increase business performance. Federal Funds Rate The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution overnight. The federal funds rate is generally only applicable to the most creditworthy institutions when they borrow and lend overnight funds to each other. The federal funds rate is one of the most influential interest rates in the U.S. economy, since it affects monetary and financial conditions, which in turn have a bearing on key aspects of the broad economy including employment, growth and inflation. http://www.investopedia.com/terms/f/federalfundsrate.asp#ixzz3mB5kCtvT Chances are since college is your next likely step I would recommend saving up for it.  Start building an emergency fund. Recommended $1,000 minimum. To start building your credit rating (when 18) get a low interest low limit credit.  Pay off the balance every month. Starting to build your credit rating now can save you hundreds of thousands when buying a house over the course of paying it off.  ie. cheaper interest rate. As for investing, the sooner you can get started the better.  Acquire preferred/stocks/bonds/REITs/ETFs/etc that pay you to own them (they pay you dividends monthly/quarterly/etc).  Stick with solid stocks that have a history of consistently increasing their dividends over time and that are solid companies. I personally follow the work/advice of Derek Foster.  He's not a professional but he retired at 34.  His first book (Stop working - Here's how you can) is great and recommend it to anyone who is looking to get started. Also check out Ramit Sethi's blog I Will Teach You to be Rich. He focuses on big wins which save you a lot over the long term.  He's also got some great advice for students as well. Best of luck! "When ""people say"", each person is referring to whatever he/she is looking at.  Interest rates tend to move roughly the same, but often there is a bias regarding long vs. short term.  In the US right now, short term interest rates are very low but there is a lot of chatter saying they will rise in the future.  The differential between long term rates and short term rates is high compared to historical norms, suggesting that the market believes this chatter.  You can also look at the differences in rates between different quality levels.  If the economy is improving, the difference in rate for lower rated debt vs. higher rated debt decreases as people think the chance of businesses failing is decreasing. Right now, any interest rate you look at is well below long term historical averages, so asserting that interest rates are low is quite safe." If you're referring to investment hedging, then you should diversify into things that would profit if expected event hit. For example alternative energy sources would benefit greatly from increased evidence of global warming, or the onset of peak oil. Preparing for calamities that would render the stock market inaccessible, the answer is quite different.  Simply own more of things that people would want than you need.  A list of possibilities would include: Precious metals are also a way to secure value outside the financial markets, but would not be readily sellable until the immediate calamity had passed. All this should be balanced on an honest evaluation of the risks, including the risk of nothing happening.  I've heard of people not saving for retirement because they don't expect the financial markets to be available then, but that's not a risk I'm willing to take. &gt; But to answer your question, the two factors you mention are positively correlated, not negatively as you postulate.   I'm not sure if there's necessarily any correlation. I'm merely stating the fact that they have so much savings that they must export capital but at the same time, they've ramped up domestic debt to somewhere around 300% of GDP which, I don't know why you say it isn't a lot, but it's probably twice the level of the average developing country.  Wealth is probably very overstated, but the mechanism for why this has happened is confusing to me. Recessions are prolonged by less spending and wages being 'sticky' downward. My currency, the 'wallark', allows a company to pay its workers in it's own scrip instead of dollars which they can use to purchase its goods, thus reducing it's labor costs and allowing prices to fall faster. While scrip in the past purposely devalued to discourage hoarding, the wallark hold's it's purchasing power. The difference is, a worker can only use it to purchase their company's good *on the date the wallark was earned or before*.  In other words, each good is labeled with a date it was put on display for sale, if  a worker earns scrip on that same day, they can trade the scrip for that good, or any good that was on the shelves on that day it was earned *or before that date*. Any good that comes onto market after the date that particular wallark was earned cannot be purchased with that wallark(which is dated), and must be purchased either with dollars or with wallark that was earned on that good's date or after. This incentivizes spending without creating inflation, and allows costs to fall which helps businesses during rough economic times.  Please feel free to read it, and comment on my site! Any feedback is welcome! "I'll try to give you some clues on how to find an answer to your question, rather than answering directly the question asked.  Why not answer it directly? Well, I can, but it won't help you (or anyone else) much in two months when the rates change again. Generally, you won't find such in brick-and-mortar banks. You can save some time and only look at online banks. Examples: ING Direct (CapitalOne), CapitalOne, Amex FSB, E*Trade, Ally, etc. There are plenty. Go to their web sites, look for promotions, and compare. Sometimes you can find coupons/promotions which will yield more than the actual savings rate. For example, ING frequently have a $50 promotion for opening a new account. You need to understand that rates change frequently, and the highest rate account today may become barely average in a week. There are plenty of sites that offer various levels of comparison information. One of the most comprehensive ones (IMHO) is Bankrate.com. Another place to look is MoneyRates.com. These sites provide various comparisons, and you can also find some promotions advertised there. There are more similar sites. Also, search the Internet and you can find various blog posts with additional promotions – frequently banks give ""referral bonuses"" to provide incentive for clients to promote the banks. Do some due diligence on the results that appear promising. Not much. You won't find any savings account that would keep the value (purchasing power) of your money over the long term. Keeping money in savings accounts is a sure way to lose value because the inflation rate is much higher than even high-yield savings accounts. But, savings accounts are safe (insured by FDIC/NCUA up to the limit), and very convenient to keep short term savings – such as an emergency fund – that you cannot afford to lose to investments. Sometimes you'll get slightly better rates by locking up your money in a Certificate of Deposit (CD), but not significantly higher when the CD is short-term."