Fed's rate cuts strike savers' pocketbooks

NEW YORK — Just when bank customers were finally getting something reasonable for their hard-earned savings, the party is coming to an end.

After several years of increasing them eager interest they paid on savings accounts and certificates of deposit, banks are starting to trim their offerings to savers. The declines are slight, usually less than 0.25 of a percentage point, but the trend is certain to continue for at least the next six months to a year, experts say.

The Federal Reserve cut interest rates in July and is widely expected to cut them again this year to help insulate the economy from the Trump administration' s trade disruption sand to support the stock market.

U.S. President Donald Trump has repeatedly attacked the Fed for failing to cut rates aggressively, and has used his criticism to link the Fed' s moves with outcomes of the stock market. However, while nearly all households have savings accounts, a tiny minority own the vast majority of stocks.

“There' s a lot more economic certainty and thought sofa potential economic slowdown, and that's been driving a lot of banks to cut back on what they' re offering to customers ,” said Ken Tumin, founder of banking news site Depositaccounts.com.

Some banks didn' t wait for the Fed to cut rates. Earlier this summer Goldman Sachs cut Marcus' online savings rate to 2.15% from 2.25%, while competitor Ally cut i ts rate from 2.2% to 2.1%.

The average online-only bank now offers an interest rate of around 1.68%.

After the Great Recession, savers looking to safely store their cash and make a modest return had few, mostly terrible options. The Federal Reserve cut its benchmark interest rate to zero and kept it that way for years. It was not uncommon to see a big bank like Bank of America or Wells Fargo offer 0.02% or even 0.01% on a traditional savings account. Even online savings accounts, which typically offer rates far higher than brick-andmortar establishments, offered only 1%.