171–180 of 180 posts
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- High yield savings accounts - CDs - Money market accounts All pay much higher than a typical megabank savings account and are equally as safe.
Sorry i meant better than high yield savings.
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No penalty CDs are strictly better than savings accounts. I was able to lock my emergency savings into a 1.6% CD the day the Fed announced rates cuts.
Why are they strictly better? You remove interest rate risk at the expense of yield. They currently pay less than high interest savings.
This is why the stock market is still going up. There is no where else to put your money. We need better 1-3% returns for savings and 401ks outside of equities. Where are people supposed to put their money these days?
Another (small) dimension to this: my brother-in-law works for an organization that acts as a thinktank for many/most(all?) credit unions in the US. When we moved to Santa Fe last year, I noted that the credit union I wanted to join (yay! credit unions!) offered an insanely low interest rate for their savings account. So I asked my BiL whether I should feel guilty about using an online "high rate" savings account ins…
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> Only real friction is I can only move $10k at a time every N (4?) days. The amount of bullshit that you Americans put up with in banking on a daily basis is mindboggling for me as an European. A bank that couldn't give me all my funds in one day would never see my business again and yield themselves a complaint at the regulatory agency.
Some questions from an American: Are transfers that take like a day or two that inconveniencing cause instantaneous transfers would only benefit me in getting a tiny bit more interest for that extra day or two i could get interest on it? With how low interest rates are these days, that basically makes it useless for me. If your money goes to the wrong routing or account number, can they fix that (literally happened t…
Waiting in the case of a reasonable savings fund of 100k for way over a month (10k every 4 days in the example I replied to) to be transferred sucks.
> With how low interest rates are these days, that basically makes it useless for me.
It's not about the interest rates, rather a "peace of mind" thing. I am used to clicking a button in online banking and know that the recipient will have the money, and all of it, in maximum 2 banking days and I don't have to spend mental energy on tracking it, worrying about a physical check being held up or lost in postal service, the recipient taking his sweet time to cash the check...
> If your money goes to the wrong routing or account number, can they fix that (literally happened to me where money got sent to the wrong routing number and I went to a chase branch and explained what happened and they fixed it)?
IBAN prevents this by having a two-digit checksum, that catches 99% of typos, number swaps and other entry errors. If you still manage to mess up, you have a ten day window for a recall. Direct debits can be reversed for eight weeks.
> What other bullshit do you perceive we have?
Still using physical checks with all their downsides. Direct debit being insecure to the point that someone getting your account data (or card swipe) can raid your bank account with the money being tied up for weeks (SEPA direct debit reversal is instantaneous and fully returns the funds). CC "rewards" cost being placed on the merchants (thus raising the CC costs for all customers) instead of being capped like in the EU. Did I already mention physical checks?
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Doesn't this just prove that there is not a competitive market in these industries? If I - and everyone else - could quickly identify which bank/gas station was acting in my interest without colluding, I would immediately switch. The fact that prices are quick to rise but slow to fall is dependent on consumer apathy and monopolistic behaviour/collusion. It might be typical market behaviour, but it's not the perfect m…
> If I - and everyone else - could quickly identify which bank/gas station was acting in my interest without colluding, I would immediately switch. I doubt this would be the case for most people for a couple of reasons. First, gas stations are pretty transactional businesses that don’t rely on recurring customer relationships to stay afloat, it’s really all about the location. When was the last time you researched al…
Your claim is that the gas station has a monopoly over its location and is therefore able to engage in monopolistic behaviour and depend on consumer apathy - this does not really negate my point.
Why would you ever have a savings account? They’re pointless as they always earn little interest. Much better to invest in an ETF that tracks something like the S&P500 with an average year on year growth of 10%, or if that is too risky invest in a government bond.
> or if that is too risky invest in a government bond. You can get 1% in a savings account in the US. TBill rates are all less than 0.25%. The latter has tax benefits, but not enough. One good way to "get a higher return" (for some at least) is to pay down debt. If your mortgage is at 3%, whatever you pay off is "earning" 2ish% after tax. If your margin loan is at 1.5%, anything you pay off earns 1.5% (because the in…
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> or if that is too risky invest in a government bond. You can get 1% in a savings account in the US. TBill rates are all less than 0.25%. The latter has tax benefits, but not enough. One good way to "get a higher return" (for some at least) is to pay down debt. If your mortgage is at 3%, whatever you pay off is "earning" 2ish% after tax. If your margin loan is at 1.5%, anything you pay off earns 1.5% (because the in…
One of the things I do is use interest free credit cards to pay for my usual expenses such as food and fuel. That frees up cash. I then use that cash to invest in ETFs. When the interest free period on the credit card expires I either sell the ETFs to pay it off or use an interest free balance transfer card to carry the debt. In that case, as long as the transfer fee is below your rate of return + inflation you profi…
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Some questions from an American: Are transfers that take like a day or two that inconveniencing cause instantaneous transfers would only benefit me in getting a tiny bit more interest for that extra day or two i could get interest on it? With how low interest rates are these days, that basically makes it useless for me. If your money goes to the wrong routing or account number, can they fix that (literally happened t…
> Are transfers that take like a day or two that inconveniencing cause instantaneous transfers would only benefit me in getting a tiny bit more interest for that extra day or two i could get interest on it? Waiting in the case of a reasonable savings fund of 100k for way over a month (10k every 4 days in the example I replied to) to be transferred sucks. > With how low interest rates are these days, that basically ma…
That 10k limit is for one shitty company. I don't have those limits because I don't use a shitty company. Does europe not have shitty companies? Different class of shitty, but weren't people unable to access their funds in wirecard because it essentially imploded due to fraud?
> It's not about the interest rates, rather a "peace of mind" thing. I am used to clicking a button in online banking and know that the recipient will have the money, and all of it, in maximum 2 banking days and I don't have to spend mental energy on tracking it, worrying about a physical check being held up or lost in postal service, the recipient taking his sweet time to cash the check...
Maybe other people are different, but I've never experienced a lack of "peace of mind" with any transfer. Every transfer I have done is instantaneous in that both the sending account and receiving account acknowledge the transfer and just put it in a pending status for a day and no transfer I have ever done has failed so whats the big deal?
> IBAN prevents this by having a two-digit checksum, that catches 99% of typos, number swaps and other entry errors. If you still manage to mess up, you have a ten day window for a recall. Direct debits can be reversed for eight weeks.
Interesting, not sure how that works but it does sound a lot nicer than the routing and account numbers we have here.
> Still using physical checks with all their downsides.
I have literally never written a check in my life. Granted, I know older people who still use them but I have no need for them whatsoever so who cares? I pay all my bills digitally and I can venmo friends cash digitally too.
> Direct debit being insecure to the point that someone getting your account data (or card swipe) can raid your bank account with the money being tied up for weeks (SEPA direct debit reversal is instantaneous and fully returns the funds).
I don't think I use that.
> CC "rewards" cost being placed on the merchants (thus raising the CC costs for all customers) instead of being capped like in the EU.
Credit card fees I can basically get entirely back through the reward with a single credit card. Could it be more fare with capped fees, sure and I'd support that policy. As a consumer, I don't care though.
It did seem incredibly expensive to provide a person to interact with. One of the banks involved was Chase and they did have a video interface where you could interact with a banker somewhere else.
I guess it works out, since the banks had thousands of dollars sitting in the bank paying no interest. And the amounts surged to hundreds of thousands as their houses were sold and before the money was distributed to the heirs.
But dealing with the general public for accounts in the hundreds of dollars has to be a money loser. Except for the overdraft and other fees, of course.