If you have ever wondered how the Federal Funds Rate changed over a period of time, I did some search to find this table. I was surprised to see the rates were 1.00% back in 2003 and also, maximum rate was 8.00%. That implies times when inflation was high. Here you can look at the table. We all know, U.S. Economy was in recession during 2002-2003 and thst was very much reflected in the Federal Funds Rate.

Federal Funds Rate Cut : How to use that

Federal Fund Rate was decreased by 0.5% last week to 4.75 from 5.25% after 4 years and if you were wondering how to take advantages of it, here are few tips

1) Lower Rates ( Home, Auto )
If you are planning to re0finance home mortgage, you will get lower interest rate. But, the effects on Mortgage Rates will be visible over a period of time. If your Adjustable Rate Mortgage is around the corner for rate reset, your interest rate increase will not be substantial.

If you are shopping for home loans, you can get lower mortgage rates. But, the key it to wait and shop around for the right moment






2) Online Savings Bank Rates:
Already you can see the Interest rates being lowered by the Banks. HSBC Online Savings account lowered the interest rates to 4.50 from 5.05 and soon we can expect other banks to follow. So, try to cash in by investing in CD's that still pay interest rates more than 5%.

3) Re-finance Mortgage to Fixed Term
If you are using Adjustable Rate, you should find lower rates within sometime now and move to Fixed Rate Mortgage. They would save you from large increase in monthly payment when rate reset comes.

4) Switch to different Credit Cards
Now, credit cards companies will lower the interest rates, so, either ask for lower rates with the existing card or switch to new cards that offer lower rates.