Analysis: High Unemployment Leads To Low Deposit Rates

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SAN ANSELMO, Calif. – A new analysis suggests, perhaps not surprisingly, a link between the national unemployment rate and interest rates paid on deposits.

The study, by Market Rates Insight, suggests that “when the unemployment rate is high, deposit rates are low and vice versa.” The analysis studied the relationship between the unemployment rates and interest rates for the past 10 years (August 2001 to July 2010), and found that 65% of the decrease or increase in deposit interest rates is attributed to fluctuations in the unemployment rate.

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