Who's really bailing out the banks?

Taxpayers, for sure. But the largely unsung victims of the financial system rescue are loyal bank depositors — especially older people who have relied on interest income from savings certificates to live.

To save the banks from soaring loan losses, the Federal Reserve did what it always does when the industry gets into trouble: Policymakers hacked their benchmark short-term interest rate, which in turn pulled down all other short-term rates, including on savings vehicles.

But this time, the Fed went to rock-bottom on rates. In December, the central bank declared that it would allow its benchmark rate to fall as low as zero.

Savers still are paying the price for that gift to the banks. Average rates on certificates of deposit nationwide have continued to slide this year, according to rate-tracker Informa Research Services in Calabasas, Calif.

The average yield on a six-month CD fell to 1.27 percent this week, down from 1.86 percent on Jan. 1 and 2.24 percent a year ago.

Anyone who has a CD maturing soon should be prepared for serious sticker shock.

Banks have been able to continue whittling down savings yields because the industry overall is flush with cash — not just from the Fed's efforts to pump unprecedented sums into the financial system but also because many Americans see no alternative but to keep their money in federally insured bank accounts. At least you know your principal is guaranteed.

Even as short-term interest rates have dived since the financial crisis exploded in September, the total sum in CDs under $100,000, as well as savings deposits and checking accounts, has soared by $507 billion, to $6.07 trillion, according to data compiled by the Federal Reserve Bank of St. Louis.

By contrast, stock mutual fund assets have plunged to $3.2 trillion from $5.2 trillion in the same period, as share prices have plummeted and as some investors have yanked their money from the market in favor of safer places — particularly banks.

Savings instruments that usually offer competition to banks are even less compelling these days.

Money market mutual funds, which buy short-term IOUs of companies or government entities, are paying an average yield of just 0.2 percent currently, according to iMoneyNet Inc. in Westborough, Mass.

U.S. Treasury bills pay almost nothing, as well. After rebounding modestly earlier this year, T-bill yields have been sinking again in recent weeks. Six-month T-bill yields were at 0.3 percent on Friday, down from 0.5 percent in late February.

Of course, the economy as a whole is benefiting from the Fed-engineered crash in interest rates. Mortgage rates are near record lows, which has fueled a refinancing wave that is saving Americans billions of dollars.

But as they try to rebuild their balance sheets, bankers would like to pay as little as they can for deposits and charge as much as they can for loans.

Wells Fargo & Co., which bought rival Wachovia Corp. late last year, trumpeted this week that it was able to hold on to 56 percent of the deposits in high-rate Wachovia CDs that matured in the first quarter. Wells persuaded most of those customers to shift to "lower-cost checking and savings accounts, in addition to lower-rate CDs," the bank said in its quarterly earnings report.

On the loan side of the equation, however, someone is standing in the way of banks' opposite goal of maximizing rates: Uncle Sam.

Given the federal government's taxpayer-funded capital injections into hundreds of banks, the industry now is mired in a major public relations mess over plans to raise credit card rates and fees.

President Obama summoned leading bankers to the White House last week to try to jawbone them on credit card charges, declaring that "the days of any-time, any-reason rate hikes and late-fee traps have to end."

For savers, the standard advice in times like these is to at least take time to shop around for accounts. Some banks want your money more than others, and they all offer the same federal deposit insurance.

Beyond that, this is just a waiting game — waiting for the economy to get better so the Fed can end the days of ultra-cheap money that bails out borrowers at savers' expense.