Low Deposit Rates May Stick Around
At the end of the 1990-1991 recessions, the national average deposit rate bounced back by 54%, which was higher than the 33% rate after the country's most recent recession.
According to research firm Market Rates Insight, the bounce back rate is the ratio between the pre-recession level and one year post-recession level. By comparing the bounce back rate of major economic indicators during the last three recessions, MRI said it can gain insight into how long deposit rates will remain low. In the last recession of 2007 to 2009, the national average deposit rate bounced back only 33% of its pre-recession level.
"The last recession was much deeper and longer than the previous two," said Dan Geller, executive vice president at MRI. "Therefore, expect the recovery time and return to pre-recession level to take beyond 2011 and probably into 2012."