Whatever Happened To Savings Accounts?

In ancient times when I was young, I was taught that checking accounts and savings accounts (which were free back then) were part of a shared bargain with your bank. You turned your money over to them and received interest on the money in your savings account. The banks used your money to provide loans for other people. The bank made money because the interest rates on the loans were higher than what they paid on savings accounts. A very simple system that worked quite well. Both sides benefited. If you had a savings account you were actually helping the bank do business.

What we now have are savings accounts that basically pay zero percent interest. What happened? My simple answer is greed on the part of the bankers, and the weirdness that is the Federal Reserve.

I am mystified by the United States Federal Reserves part in all of this. I understand that they have a part in setting interest rates for the United States Treasury. Banks and other lenders set rates based on these rates. What I don't understand is how what the Fed does and says drives the economy and the news cycle, etc. I don't think Alan Greenspan did either. In some ways I don't care what the Fed does and says. I base my equity investments on a company's earnings, basically. Yes, interest rates will have an effect on earnings, however, that effect is equal. Companies that compete against each other all face the same Fed rate changes. Life goes on. What's the big deal?

I do have one proposal. Because of inflation zero percent interest rates are actually harmful to some people, for example, anyone who needs or wants some form of short-term stable savings, someone like a retiree, I think Congress should pass a law that would place a limit on how low personal savings account interest can go. My suggestion is three percent. There could be a limit on the amount of money in the account that this applies to ($10,000.00?), although that would complicate things. I think this limit would be necessary because of the more well off. They would benefit disproportionately simply because they could put in much more money.  Basically what I am suggesting is a way for people with less money to gain some interest on their money, without the Fed having an effect on it. If what the Fed does is really so important what I'm proposing would not stop that effect. (It would simply lessen it ever so minutely.) People would have a way to save for a down payment on a home or automobile that was simple and effective. If these savings were used in this way it would benefit the individual, the bank, and the economy.