‘Expect the unexpected’ is an expression that is applicable now more than ever, especially amidst a pandemic. The expression’s relevancy continues early in 2021 in the financial markets. Last year, an unexpected novel virus shocked the overall stock market and stocks dropped about 30%.

On a trip to Cambridge England before the Covid-19 breakout, I saw young university students carrying signs that read “No More Capitalism!” At the time I chalked it up to the zeal of youth looking for something to do on a slow Saturday afternoon. However, what started out as placards and protests is now seeping into mainstream thought as we more frequently hear about “rethinking capitalism” or “the next stage of capitalism.”

Long Term Impact of 1% CDs

Albert Einstein is supposed to have remarked that a force in nature even stronger than gravity is the power of compound interest.

His words are never more true as we watch the prolonged results of earning what can only be described as chronically paltry CD interest rates. Since the crash of 2008, bank savings rates have tumbled down and have not gotten back up. A one year bank CD pays about 1% interest.

If you are willing to go longer and lock your money up for five years, the national average annual rate is about 1.7%. If you are looking at a bank money market or savings account, you will probably have to count the zeros to the right of the decimal point to figure out how close your rate is to nothing.