AAII Survey: Readers Weigh in on Impact of Low Interest Rates


Depending on who you ask, the near-record-low interest rates of the last decade have either been a blessing or a curse. If you are a borrower, for things such as mortgages, car loans, credit card debt, etc., the low rates have been good. If you are a saver, however, the low interest rates mean you haven’t been generating much income from your idle cash.

Others would also argue that the low interest rates have been a key contributor to the bull market that is nearing its 10-year anniversary. Companies have been able to borrow at very low rates to fund projects that spur earnings as well as take on additional debt to buy back shares or boost dividends. Since fixed-income and savings have been returning such low rates, investors have been investing in the stock market to generate needed returns, further benefiting the overall market.

AAII Weekly Survey Question

To see where our readers stand on whether the low interest rates of the last 10 years helped saver and investors or consumers and business borrowers, last week’s survey asked:

Which do you agree with more: that low interest rates do good for consumers or that low interest rates hurt savers?

Here are the results of the survey:

In all, 1,002 readers participated.

By a slight margin—54% to 46%—our readers feel that the low interest rates of the last 10 years have hurt savers and investors more than they have helped consumers and business borrowers.

Weekly Special Question

Low interest rates impact everyone differently, especially depending on whether they are accumulating assets such as new homes or whether they are primarily saving or investing assets for retirement. To find out how the interest rate environment of the last decade has impacted our readers, last week’s special question asked:

In what way(s) have the low interest rates of the last decade affected you as an investor?

In all, we received 215 responses.

By a more than two-to-one margin (70% to 30%), our readers feel that the low interest rates of the last decade have negatively impacted them.

Among the responses we received, more than 25% of readers say the low interest rates of the last decade forced them to hold a larger percentage of their portfolio in equities (smaller percentage of cash) or hold more in other “risky” investments to overcome the loss of interest income.

Nearly 23% say that low interest rates have hurt them because they have not received income from their cash savings or have been paid very low rates on CDs, bonds and other “risk-free” investments.

More than 10% of respondents say the low interest rates have led to greater returns in stocks and have prolonged the current bull market.

Roughly 7% say the low interest rates of the last decade have benefited them in the form of lower mortgage payments.

Here is a sampling of the responses from our readers regarding how the low interest rates of the last decade have affected them as an investor:

  • “Low interest rates assisted me in purchasing my retirement condo. Mortgage rate drop allowed me to use less funds.”
  • “Leaving money in a bank with low interest rates produces no income fur consumer but gives working capital for the banks.”
  • “Low interest rates have influenced my decision to hold more of my assets in equities.”
  • “Low interest rates have almost killed savings accounts. The income is almost nothing! A lot of older people, like my parents, depended on savings for retirement income.”
  • “The low interest rate environment has changed my focus of how I invest some of my funds to more dividend paying securities.”
  • “Been terrible for Social Security increases.”
  • “My stock portfolio has tripled over the past ten years as the market continues its bull run.”

Everybody has an opinion! Why not give us yours? Participate in our weekly member poll, updated every Monday, and see the results online at www.aaii.com/memberquestion.



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