3 Ways To Take Advantage Of The Fed Rate Cut

Bankrate shares three ways consumers can take advantage of the recent federal interest rate cut.

Consolidate your debt: Take your high interest loans and put them into one low payment
Get a better loan: Talk to your bank and see if they’ve cut rates on its loan. Talk with a loan officer about renegotiating any high-interest or adjustable rate loans into a fixed low interest loan.
Prepay or Save: Take the money that would have gone to high-interest payments and use it to pay down the principal. Or sock it in a high-yield online saving account or investment.

3 ways to follow the Fed’s rate cut [Bankrate]
RELATED: What The Fed’s Rate Cut Means For You
(Photo: Elizabeth Superfantastisch)


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  1. wezelboy says:

    They forgot one- stuff your mattress with Euros.

  2. DallasDMD says:

    Unfortunately those “high yield” accounts are not nearly as high anymore.

  3. ftrain says:

    Does this affect student loans as well? Anything that hurts Key Bank makes me happy.

  4. MattO says:

    what if i have a fixed rate mortgage already? is it possible to lower the rate without doing a refi, which usually ends up costing thousands in closing costs?

    i have only had the mortgage for 6 months, and its a 30 yr fixed….but anythgin to lower our payments would be great :-)

  5. Ben Popken says:

    @DallasDMD: 4.5% at HSBC Direct is still pretty good.

  6. supra606 says:

    @DallasDMD: I think Washington Mutual’s online savings account is still at 4.75%.

  7. DallasDMD says:

    @Ben Popken: I miss my 5.40% APY from AmTrust Direct. All banks have been responding to the rate cuts by cutting the interest down on their accounts.

    By all means, save! Its just not as rewarding as it used to be.

  8. mac-phisto says:

    i’m all for saving, but typically a rate cut means lower returns on savings, which would actually mean this is a better time to invest, no?

    isn’t that the whole purpose of a rate cut? spurn capital investment by stripping away the incentive to save?

  9. Skiffer says:

    Savings accounts are for suckers…

    I found some companies that give out ~10% annual dividend yields. Their capital appreciation hasn’t been shabby, either – one has doubled since I bought in the spring…

  10. spinachdip says:

    @mac-phisto: Well, I recently put a chunk of my money in ING Direct’s savings account, since their 4.3% interest isn’t appreciably lower than a typical 6-month CD. It’s more liquid than a CD and less volatile than investment, so it works for me.

    As for investing, I just don’t like the markets right now. There are companies with good fundamentals that can survive the inevitable recession, but for the most part, at least the US market isn’t so hot right now, while the emerging markets are a bit too unpredictable for my taste.

  11. AndyDuncan says:

    Careful, bankrate is hardly an unbiased source of information. They are in business to get you to refinance/consolidate/take out a loan through one of their advertising partners and they have little shame in tricking you onto a lead-gen form.

    As with the last rate cut, just because the fed cuts the rate, doesn’t mean that the rate you’ll get on your loan has gone down. Banks anticipate the cuts months in advance and are rarely caught off guard.

  12. mandarin says:

    Did that cat just crap all over those dollar bills?

  13. mac-phisto says:

    @spinachdip: i like ing too & tuck a bit away there every week. it isn’t holding a stick to the 15% my 401(k) has been pulling in, though. yes, emerging markets are unpredictable, but i make the money there short-term & then divert it into index funds which are still performing better than 4.3%.

    i would invest more on the side, but i’m not maxing out my 401(k) as it is, so that doesn’t make much sense.