Interest rates are low enough now that they are lulling me to sleep. As my CD’s mature from last year, I look online to see what I can get now in interest for the money. Last year I was getting somewhere between 1% and 2% and right now I can’t get anything near that.

After doing the math, when rates get down to where they are now, the incentive to take the trouble to actually leave my house and go to the bank and open up a new CD is almost nonexistant for me. Likewise it is almost not worth my time to pick up the phone or go online to open up new accounts either.

So, I find myself sitting here wondering when will interest rates go up and doing nothing other than letting my money sit there everyday earning nothing. This post is kind of a pep talk for me because even though rates are low, something is better than nothing.

If I don’t want to lock up my money for a year in hopes rates go up,  then I should have it in a money market. Again money market interest rates aren’t any better but they do give me liquidity and something that is risk free. Something is better than nothing right?

It really upsets me that you never seem to hear anything in the news about how these low interest rates hurt people. I know many people are in debt but what about those of us that aren’t? What about seniors who have all their money in cash equivalents and are making next to nothing? How are they going to survive? Nobody seems to care and it gets no publicity at all. It’s too bad that we are a nation of debtors instead of a nation of savers.

You can see by the chart below that one year US Treasury rates have been below .5 of a percent for quite some time now and they are projected to stay that way for much of, if not all of 2010.

Buying US Treasury notes used to be the thing to do to get a safe guaranteed interest rate if you didn’t want to put your money in something more risky such as stocks. Retirees and people who live off a fixed income were candidates to buy Treasury’s and now with rates so low, what can you do?

When you buy a US Treasury you are loaning money to the government. In today’s political environment, that alone may be reason enough for some to not buy them. But with interest rates so laughably low, why not look for other sources of interest.

For a 1 year Bank CD you can now get about double what the Fed is paying you and if you put your money in a credit union you might even be able to get triple the rate. There are many credit unions that anybody can join so they are worth looking into.

The best money market interest rates are also comparable to what Treasury bills are paying and with them, your money is not locked down at all. Of course the more money you have will give you better rates for money market interest but if you have more than $30,000 or so, you should be able to get a rate that is similar to a US 1 year Treasury bill.

Money market accounts historically paid low rates but now with rates so low everywhere, they are not that bad and sometimes better than other options. Again, the more money you have means the better rate you can get and it all comes without having to commit the money for any period of time as you always have access to it without penalty.

For people that have savings, one of the biggest questions they have is where to put their money to get the best interest rates? Many folks right now are leery of the stock market and don’t want to add more money to it. In fact, many might be reducing their stock positions just to feel safer. These people want to find the place where they can make the most interest with the least risk.

Of course interest rates are lower than they have been in decades and getting 1% or less is insulting but that is the reality right now. The Federal Reserve has manipulated interest rates down to this low level where they have been for quite some time now. It is really just another form of government redistribution of wealth if you ask me. These low rates only hurt those with money and retirees that depend on interest income to live.

If you are struggling with where to park your money right now there are not really any options that will pay more interest. Treasury bills pay a laughably low rate and you can get a higher rate by getting a 30 year bank certificate of deposit but is that really smart? With rates so low it doesn’t seem smart to tie your money up for very long as rates can pretty much only go up from here. So, you have to decide how comfortable you are with locking up your money in a CD and how long a time period is best. Or you can choose a money market account and get a reasonable rate with total liquidity at any time in case rates do get better.

Interest rates can’t go much lower and so it is reasonable to assume we are pretty much at a bottom here. That means rates will go up but we have no way of knowing when. With Obama in power and redistribution of wealth always popular with Democrats, it seems rates may stay low for another 2 or 3 years. I know many people believe the Fed is independent but is it really? Obama doesn’t like “rich” people and he defines them as those who make over$250,000 a year. Well, with inflation that number is not anything like what it used to be.

If you do have money to invest or park, the best money market interest rates are not much lower than CD rates at the highest deposit levels. The more you have to invest, the higher interest rate you will get with a MMA and it gives you the ability to withdraw at any time with no penalty. Right now, they might be your smartest option.