What is the passbook savings rate?

The passbook savings rate refers specifically to the interest rate offered by banks or credit unions on passbook savings accounts. These accounts are traditional savings accounts where the account holder receives interest on deposits made, allowing for safe and accessible growth of funds. The return is typically lower than more aggressive investment options but provides a reliable method for earning interest while maintaining liquidity and safety for the depositor's money.

In essence, the passbook savings rate is designed to incentivize individuals to save, providing them with a predictable income stream based on their deposits. This is particularly important for conservative investors or individuals who prioritize capital preservation over high returns. Understanding this helps to differentiate it from other types of rates, such as those associated with risky investments, government bonds, or newer financial products like cryptocurrencies.