The Bankrates’ auto loan: $22,000
Rates have fallen from 9.34 percent in May 2000, to 7.27 percent.

Total savings on their car loan would have been
$21.45 per month, or
$1,029.60 over the life of the loan.

Click here for the latest auto loan rates from Bankrate.

The Bankrates’ credit card: $7,023
Joe and Jill’s standard variable rate card dropped about 3 percentage points since the rate cutting began. In May 2000, the rate was 16.85 percent, and by our latest survey, it was readjusted down to 13.78 percent. Their monthly savings is
$10.59 per month or
$381.24 over three years.

A credit card issuer’s rate adjustment generally moves more slowly than the Fed changes, since most reprice interest rates after a change in the prime rate. Depending on the policy of your financial institution, it could take several weeks or even months to see a change in rates. Plus, credit cards that have interest-rate “floors” may have already hit their lowest rates.

Click here to find the best credit card rates from Bankrate.com.

The Bankrates’ nest egg: $5,000
Unfortunately, the rate cuts by the Federal Reserve Board have had a dramatically adverse effect on our couple’s savings account. And the change in the rate was fairly swift.

In May 2000, their one-year $5,000 certificate of deposit was earning
$277 at a yield of 5.54 percent. Today, that same $5,000 is only earning
$60 — a difference of
$217.

Click here for the latest savings rates locally and nationally from Bankrate.

The rate cuts could have netted the Bankrates a total savings of $117,763.25.


Difference the Fed makes in what the Bankrates pay for loans
 
May

2000

% rate

May

2000 payment

May

2004

% rate

May

2004 payment

Difference

Mortgage
($165,000, 30 years, fixed rate)

8.65%
$1,286.29
6.07%
$996.70

$289.59 per month
$104,253.41
over the life of the loan

Home equity line of credit
($30,400, paying interest only for 10 years)
9.21%
$233
4.74%
$120
$113 per month
$13,588 over the life of the loan
Home equity loan
($40,253, 15 years)
10.07%
$434
7.18%
$366
$68 per month
$12,316
over the life of the loan
Auto loan
($22,000, 48-month new car loan)
9.34%
$551.03
7.27%
$529.58
$21.45 per month
$1,029.60
over the life of the loan
Credit cards
($7,023 balance, goal of paying it off in three years)
16.85%
$249.87
13.78%
$239.28
$10.59 per month
$381.24 over three years
 
Difference the Fed makes in what the Bankrates earn
 
May

2000

% rate

Annual interest

earned

May

2004

% rate


Annual interest earned
Difference
Certificate of deposit
(1-year CD, $5,000)
5.54%
$277
1.19%
$60
-$217
Sources: Bankrate.com weekly surveys, Consumer Bankers Association