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How Low Interest Rates Are Hurting You

Interest rates have been low for a long time, as the Federal Reserve tries to spur economic growth. Yet even though low rates are great for borrowers, savers have been getting the short end of the stick.

In this following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at low rates and how they've hurt many people. Dan notes that low rates are helpful in making loans like home mortgages cheap. But because Wells Fargo (NYSE: WFC  ) , Bank of America (NYSE: BAC  ) , and other major lenders tend to tie consumer loans and credit card rates to formulas that provide for additional interest on top of popular benchmark rates, most consumer loans have already hit the lowest levels they're likely to see. Meanwhile, Dan points out that savings rates have been so low that they've forced people into riskier dividend stocks, either via individual companies or through dividend ETFs. Dan concludes that as hard as it is for some savers, low rates aren't likely to end soon.

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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