Interest rates are largely dictated by the Federal Reserve; they are low because the Federal Reserve's rate is almost zero.
For the most part, banks are in the business of lending money, not buying stocks. Since the Fed's rate is low, banks do not pay much interest on their deposits and don't charge a lot more interest to their borrowers.
Investing in the stock market is considerably more risky, and the stock market# returns have been wildly varied by period since 2008. The average return on stocks for the last few years has been unspectacular, too.
Or put another way: in a down economy, few people have a good formula for making money. This is tautological: if a lot of people knew how to get a consistent and good return on investment right now, we'd have an up economy. :D
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timeasmymeasure
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Date: 2011-07-21 10:43 pm (UTC)For the most part, banks are in the business of lending money, not buying stocks. Since the Fed's rate is low, banks do not pay much interest on their deposits and don't charge a lot more interest to their borrowers.
Investing in the stock market is considerably more risky, and the stock market# returns have been wildly varied by period since 2008. The average return on stocks for the last few years has been unspectacular, too.
Or put another way: in a down economy, few people have a good formula for making money. This is tautological: if a lot of people knew how to get a consistent and good return on investment right now, we'd have an up economy. :D