Knowledge is power.
We empower our clients.

Get Started Now
<< Back to Helpful Tips

How Low Interest Rates Affect Your Money

Following the coronavirus pandemic, the Federal Reserve expects to maintain low interest rates for the foreseeable future. The Fed’s decisions affect nearly everyone because of one fact: It impacts consumers’ cost to borrow money. For example, when interest rates rise, the interest expense on variable rate debt balances generally rises.

Low interest rates can be beneficial to investors who currently have debt or need to borrow, as borrowing money becomes less expensive. In a low-rate environment, you often see lower interest rates on credit including credit cards, auto loans, private student loans, small business loans, and home equity lines of credit.

How does this translate to your finances? Consider the following:

  1. Lower interest rates may mean it is a good time to consider loan refinancing, which replaces your existing loan with a new one at a lower interest rate.
  2. For individuals with multiple loans, debt consolidation allows for paying off multiple loans with a new single loan at a potentially lower rate.
  3. Lower interest rates can also translate to a lower minimum payment on credit cards and a lower cost to carry a balance from one month to the next.
  4. For loans and mortgages, a low interest rate can mean lower monthly payments, ultimately resulting in less interest paid out over the life of the loan.
  5. Potential home buyers may also be able to find that they are able to borrow a greater amount, allowing them to get more house for the same monthly cost.
  6. By decreasing overall borrowing costs, a low-rate environment may also increase your savings. More money in your bank account could help you save more toward your emergency fund or invest toward a long-term financial goal.

One downside to lower rates is that banks typically pay customers lower interest rates on savings accounts, certificates of deposits (CDs), and money market accounts.

If you are unsure of how to navigate and explore investment options during this changing economic landscape, our experienced Financial Advisors at Jemma Financial can help.

Log In to Your Existing Account Get Started Now

Need assistance? Call 855.662.2121 or email info@jemmafinancial.com

You are now leaving Jemma Financial

Yes, I would like to leave No, I would like to stay

Important Notice

You are now leaving the Jemma Financial Services website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) website.

Schwab is a registered broker-dealer, and is not affiliated with Jemma Financial Services or any advisor(s) whose name(s) appear(s) on this website. Jemma Financial Services is/are independently owned and operated. [Schwab neither endorses nor recommends {Name(s) of Investment Management Firm(s)}, unless you have been referred to us through the Schwab Advisor Network®. (This bracketed language is for use by Schwab Advisor Network members only.)] Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with “Name(s) of Firm(s)” under which Schwab provides Jemma Financial Services with services related to your account. Schwab does not review the Jemma Financial Services website(s), and makes no representation regarding information contained in the Jemma Financial Services website, which should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

IMPORTANT NOTICE

You are now leaving the Jemma Investment Advisors, LLC Website and will be entering the Charles Schwab & Co., Inc. ("Schwab") Website. Schwab is a registered broker-dealer, and is not affiliated with Jemma Investment Advisors, LLC, or any advisor(s) whose name(s) appears on this Website. Jemma Investment Advisors, LLC is independently owned and operated. Schwab neither endorses nor recommends Jemma Investment Advisors, LLC. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with Jemma Investment Advisors, LLC under which Schwab provides Jemma Investment Advisors, LLC with services related to your account. Schwab does not review the Jemma Investment Advisors, LLC Website, and makes no representation regarding the content of the Website. The information contained in the Jemma Investment Advisors, LLC Website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

Continue to Schwab

This will close in 0 seconds