What Consumers Earn in Interest Income vs. What They Pay in Interest Expense

August 15, 2023

by Wolf Richter Wolf Street

One reason why the drunken sailors are in no mood to slow down. Lots of them make a lot more money on T-bills, CDs, money-market funds. Others pay more.

Treasury bills up to six month all yield over 5.5%. One-year T-bills yield around 5.4%. This is money that is deemed to have no credit risk, and minuscule duration risk. Lots of FDIC-insured brokered CDs (sold through a broker), and some CDs sold directly by banks are offered at around 5.5%. Money-market funds yield over 5%. FDIC-insured high-yield savings accounts yield over 4%. Consumers have many trillions of dollars in these investments, especially older consumers that are more conservative with their nest egg.