Low interest rates have helped the economy recover from the financial crisis. But it has also hurt savers, and Wells Fargo (NYSE:WFC), JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), and other big banks seem stingier than ever when it comes to paying interest on bank accounts. Will a trend toward rising rates help savers?
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at where investors can get better rates from banks. Dan notes that big banks like the aforementioned ones don't have much incentive to pay attractive rates to depositors, as they can get funding cheaply through the Federal Reserve and currently have more than enough liquidity for their own needs. By contrast, Dan recommends looking at smaller banks and credit unions, which have to fight to get the capital they need to operate effectively. Dan gives one solid example of a financial institution paying almost a full percentage point above the next-highest bank on five-year CDs, noting that it pays to shop around for the best deals you can find.
Fool contributor Dan Caplinger owns warrants on Wells Fargo, JPMorgan Chase, and Bank of America. The Motley Fool recommends Bank of America and Wells Fargo and owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.