HSBC has announced a rate drop on their Online Savings Account.  Their new rate is 3.80% APY.  When I first opened up my HSBC Online account, the rate was 5.5% APY ( I think ).  3.8% is a big drop from 5.5, and a part of the reason that I moved my funds elsewhere.  Granted, the rest of the online savings accounts will be following suit in the very near future.  HSBC has always been very, very quick about following a Fed rate cut. 

When the Fed dropped the federal funds rate, they guaranteed that folks who have high yield online savings accounts would take a beating.  Perhaps a subtle encouragement to stop saving and start spending, thus spurring the economy?  Who knows.  Maybe it’s time to make sure any extra funds ( beyond your emergency fund ) are invested in higher yielding options rather than a savings account.  Mutual funds or stocks come to mind, of course.  I’m still building up my emergency fund so I’m in no rush to move funds around.  Others may have some thinking to do.

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