when is ING Direct going to raise the interest rate back up?

Question

i just opened an account with them, and their savings account APY is 4.3%.

any idea when or why that could go up [or down]??

Answer 1

Short-term interest rates, such as those of bank deposits or ING accounts, can fluctuate at any time. They usually track the movement of the "Fed Funds Rate" which is an overnight rate set by the Federal Reserve's Open Market Committee, chaired by Ben Bernanke. Right now, the FOMC seems to be more inclined to cut rates (as they did in September), so I would expect the next move in ING rates to be downward.

Answer 2

You need to understand the relationship between the FOMC handling of the economy and interest rates in general.

The Federal Reserve (about 4 weeks ago) lowered the Fed Rate by .50%. The cost of money has in turn gone down. Savings Rates would natrually follow.

INGDirect pays higher rates than most. Better "payers" include;
www.GMACBank.com
www.HSBCDirect.com

All are FDIC insured.

Answer 3

ING pays money based on what it can lend it out for. So they will pay less to get the money (from You) than they can get for lending it out to someone else.
The difference is their income qwhich covers expenses and gives profits to it's share holders.

I don't know what your bank pays on Deposits on bank accounts, but it is considerably less than ING,,But there are better rates of retuern if you are willing to tie up your money for longer terms.