“I couldn’t afford to retire full-time,” said Sanchez, who lives in Manhattan. “I have some money in fixed income and it doesn’t make much money. And I have some money in cash and that doesn’t make any money at all.”
Sanchez said that when he first started an annuity in 2005, his interest rate was 5.25 percent. Now it’s 2 percent, he said. That means that instead of getting a monthly payout of $700, he gets $413.
“The downside of the current monetary policy is that it is corrupting financial decision-making and requiring folks to take a little more risk than perhaps is proper,” said Roy M. Whitehead, chief executive officer of Washington Federal Inc., a Seattle thrift. “We’re penalizing those who behaved well during the time leading up to the financial crisis. It doesn’t seem fair.”
With the Fed’s lending rate at 0.25 percent, JPMorgan Chase & Co., which leads U.S. banks with $1.14 trillion in deposits, offers to pay 0.01 percent annual yield on savings accounts of less than $10,000.
Withdrawal Fee
Charlotte, North Carolina-based Bank of America, the second-biggest in deposits with $1.06 trillion, offers the same rate on the same deposit amount. Three withdrawals a month are free, according to the bank’s website. After that, the bank charges $3 per withdrawal.
Anne Pace, a Bank of America spokeswoman, declined to comment. Jennifer Zuccarelli, a spokeswoman for New York-based JPMorgan Chase, did not respond to requests for comment.
Bernanke said this month that the zero-rate policy will continue into 2015.
“The way for the Fed to support a return to a strong economy is by maintaining monetary accommodation, which requires low interest rates for a time,” the Fed chairman said in an October speech to the Economic Club of Indiana. “If, in contrast, the Fed were to raise rates now, before the economic recovery is fully entrenched, house prices might resume declines, the values of businesses large and small would drop, and, critically, unemployment would likely start to rise again.”
Four-Year Low