The dark side of low interest rates

Savers face dilemma of raiding their nest eggs or taking risks on stock market

The extraordinarily low interest rates in place today are a boon when you're buying a house, refinancing a mortgage, leasing a car or paying off student debt. If you qualify for a loan, low rates can help you spend less and get more.

But there is a dark side to falling interest rates. While they are helpful for qualified borrowers - and have contributed to tremendous returns for people who have held bonds for many years - they are terrible for savers.

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A version of this article appeared in the print edition of The Sunday Times on August 09, 2020, with the headline 'The dark side of low interest rates'. Print Edition | Subscribe