Nearly, each day, the media, including, radio, television, newspapers, and Internet websites, mention, and ponder, Interest Rates. However, merely, are these discussions, sufficiently, detailed, and well-explained, so most of the people, truly, understand, what it means and shows, and the potential difficulties, etc.? Why should the average individual, care, about whether, these are increasing, falling, or steady? How do they impact us, in our regular, lives? Although, there are several, aspects of our lives, where these matter, and this article will attempt to, briefly, review, examine, and discuss, 5 areas, which may be really, significant, to most individual.
- Stock market: How often, have you heard, someone, say, the stock market, didn’t actually matter much to them because, they don’t invest in stocks? In reality, however, if you have any retirement bank accounts, hold any mutual funds and so forth they matter, considerably! Moreover, when interest rates, are less, as they currently are, there are fewer ways and places to invest and/ or put one’s reserves – in. When/ if, banks and reserves pay, interest/ dividend charges, which are so – less (below the rate of inflation), it leaves far – lesser choices, and, in many cases, this creates a rising, stock market (in terms of costing).
- Real estate market: Commonly when the cost of borrowing is low loan duties are extremely, attractive, and, thus, home prices, increase, and the overall, real estate market, goes high, in cost. Of, course this depends on other elements such as: Supply and Demand; inventory; and the overall economy, and employment, conditions. In the current time, we are witnessing, a rate of price rising, we have merely (if, ever), seen, but, moderately, some of this, is related to changing awareness and priorities, after this threating pandemic! The decreased duties, the less it costs, per rupee in hundreds and thousands to pay one’s mortgage, monthly!
- Credit card use: Providers of credit cards, often, particularly, when interest rates (cost of loan) are low, offer best charges for using their cards. When individual, experience, greater optimism, in the upcoming, they tend to credit, and use credit cards, more!
- Personal loans: Since, it costs less, to loan, when rates are reduced; many are more wishing to take – out, personal loans! Obviously, when, these Interest Rates, finally, go – up, or, at least, normalize, these things become less attractive.
- Bonds, and bank interest rates: For many ages, the general bank account, paid a constant Interest Rate. I recollect, this rate, as being, between 4 and 5%, for ages, and then, for a small – period, rates going much higher, because of rise, and other economic situations! Today’s rates are, historically, less, and, in – fact, quite, a bit, less than the cost of living, rises. Obviously, these will change after some time but it is risky, speculative, and ill – suggested, to attempt to market – time!