A Harmonic Convergence On Rates

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For what is believed to be the first time, short-term interest rates paid on overnight funds fell to just 1% at the end of June, converging with average savings rates for credit unions, which hit the 1% mark on the same day.

The Federal Reserve, in its June 25 action, had cut the target rate for overnight Fed Funds to 1%, the lowest since 1958, but the overnight markets hovered above the target until last Tuesday, July 1. That's the same day the benchmark savings rate for credit unions, dividends paid on regular shares, hit the 1% mark for what is believed to be an all-time low, according to rate-tracke DataTrac Corp.

Average rates paid on share draft and money market accounts also drifted to all-time lows of just 0.59% and 1.16%, respectively.

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