U.S. interest rates have soared everywhere but savings accounts
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Re: U.S. interest rates have soared everywhere but savings accounts
#2Consumers have been beaten down an now don't expect interest on savings account to amount to much. There are a small group that chase the limited time 5% offers, but like all corps, banks are taking that margin for profits.
Re: U.S. interest rates have soared everywhere but savings accounts
#3Consumers have been beaten down an now don't expect interest on savings account to amount to much. There are a small group that chase the limited time 5% offers, but like all corps, banks are taking that margin for profits.
For now. Hopefully competition will come to savings accounts eventually.
Wouldn't expect the rate to ever beat inflation, though, since it is risk free (thanks FDIC!).
Re: U.S. interest rates have soared everywhere but savings accounts
#4Consumers have been beaten down an now don't expect interest on savings account to amount to much. There are a small group that chase the limited time 5% offers, but like all corps, banks are taking that margin for profits.
There’s the /r/churning crowd then there’s the DeFi crowd. Yield chasing is becoming more popular.
Re: U.S. interest rates have soared everywhere but savings accounts
#5Real yields matter. It's an inflation tax.
If inflation is high and the interest rates are low. This tax is on you for holding currency or currency likes. Bonds for example are literally dumb to buy. Why are people buying them? They are legally required to buy them in some cases.
What happens is that those 'savings accounts' are paying the inflation tax. Whereas someone with a mortgage at say 2% and inflation is 8%. You are earning 6%. This generally speaking can be defined as wealth transfers from retirees to a lower generation. Primarily Boomer -> Millennial. This will and is causing lots of animosity between the generations. The boomers quite obviously didnt save enough for retirement and thought they could indebt a lower generation? Hilarious failure.
Re: U.S. interest rates have soared everywhere but savings accounts
#6Just go for I-Bonds instead.
Re: U.S. interest rates have soared everywhere but savings accounts
#7Real yields matter. It's an inflation tax. If inflation is high and the interest rates are low. This tax is on you for holding currency or currency likes. Bonds for example are literally dumb to buy. Why are people buying them? They are legally required to buy them in some cases. What happens is that those 'savings accounts' are paying the inflation tax. Whereas someone with a mortgage at say 2% and inflation is 8%.…
Or it's just a way to screw younger people who didn't lock in fixed rate mortgages when they could.
Re: U.S. interest rates have soared everywhere but savings accounts
#8Just go for I-Bonds instead.
Yes, these are becoming more popular. Unfortunately, there is an annual purchase limit that is pretty low ($10K per person plus maybe an extra $5K if you can use a large income tax refund).
There was a time not that many years ago (15?) where I was actually earning higher interest in a bank CD than I was paying on my mortgage. I was also able to get short term cash advance at low introductory rate on a credit card, like $20K, and invest it short term at a higher rate. Good times.
Re: U.S. interest rates have soared everywhere but savings accounts
#9Real yields matter. It's an inflation tax. If inflation is high and the interest rates are low. This tax is on you for holding currency or currency likes. Bonds for example are literally dumb to buy. Why are people buying them? They are legally required to buy them in some cases. What happens is that those 'savings accounts' are paying the inflation tax. Whereas someone with a mortgage at say 2% and inflation is 8%.…
>Whereas someone with a mortgage at say 2% and inflation is 8%. You are earning 6%.
Only if your income goes up 8% a year due to inflation.
Re: U.S. interest rates have soared everywhere but savings accounts
#10Clickbait title, the fed rate went from 0.25% to 0.5% hardly soaring. Savings accounts previously paid like 0.04% according to article, that's because they need margin and they can keep them low cuz people won't swap banks for half a percent (not that it'll get there anytime soon)