Anonymous

16 Mar 2021

∙

Interest rate: Effects on bank stocks and savings interest rate?

I hear interest rates are rising. Will it continue to rise and what will be your take on the following..

1) i have made a 45% return on US bank stocks. Its cyclical stock so i should sell off when it reaches a "peak". Do you anticipate interest rates to rise further? When do you think is a good time to sell my shares? Thinking of rotating into Tech since rising interest rates diminishes growth stocks.

2) will OCBC360 and DBS increase back the high monthly interest to savings acc?

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Chris

16 Mar 2021

Owner and Writer at Tortoisemoney.com

Tough question to answer. The Fed seems to imply that the interest rates will stay low until the economy recovers. Supposedly 2023, but might shift earlier with good economic data (and inflation I guess). Personally, I'm not expecting a rise anytime soon but that's just my opinion and I'm pretty heavy on tech anyways.
Likely when the interest rates rise from the Fed, the banks will increase as well. But don't expect it to come anytime soon. If there's anything more scary than inflation, it's deflation ahahhaha. Note that new and floating rate loans will get more pricey too when the i/r rises too.

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Is ELASTIQ another great alternative to High Savings A/C with 3 years locked in interest rate while banks may continue to adjust the interest rate down further?

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