Client Questions: The Challenge of Low Interest Rates

Client Questions: The Challenge of Low Interest Rates
12 Dec 2016

Hello again! It’s Matt from, and today, a client called me concerned about the low interest rates. Low interest rates are a positive for people borrowing for school, home improvement projects, cars and homes. However, for those interested in rate of return, these times can be difficult.

Let’s take a look around the world…we find that major economies, such as Japan, Germany and Switzerland all have NEGATIVE interest rates. So, when you put your money in the bank in these, and roughly a dozen other countries, you’re actually paying the bank to hold on to your money!

The number one financial instrument in Japan is a FIRE SAFE! Seriously! People would rather keep their cash in their house than put it in the bank. The reason this is happening is that the government wants you to spend money to stimulate the economy, rather than saving it.

This creates a money multiplier effect as it works its way through the system.  Say what you want about the US economy, we still do not have negative interest rates. As you’re examining where you want your money to go, remember the difference between the US and other countries. A positive interest rate is better than a negative interest rate.

If you have any questions about positive versus negative interest rates or if it’s “OK” to get 1% on your savings or CD, just, because saving for retirement or your kids’ college education is more than just stocks and bonds.


Matt Westberry

As an independent financial professional, Matthew R. Westberry’s goal is to help you create a personalized investment plan that is unique to your situation, attitude and goals. He is dedicated to building long term relationships and providing continued service to ensure that your objectives are met. Matt takes a personalized approach with his clients, he will sit down at your kitchen table, take the complex issues facing retirees & pre-retirees and put together a comprehensive, easy to understand plan that will help you achieve your financial goals. Matt graduated from Coe College in 2005 where he majored in Business Administration and Economics. Matt is currently enrolled in The American College of Financial Services Certified Financial Program. He believes that continuing his education benefits both him and his clients. Matt is currently an Investment Advisor Representative with Cambridge Investment Research, Inc. He holds the series 6, 7, 63 and 65 licenses as well as accident, health and life insurance licenses. Matt currently resides in Marion, IA with his wife Cassandra and son Landry.