Is this a US problem? In India you can easily get 5% interest in savings account. Maybe an opportunity to move money to Indian banks through crypto and then get it back after getting that sweet interest.
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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
#52Is this a US problem? In India you can easily get 5% interest in savings account. Maybe an opportunity to move money to Indian banks through crypto and then get it back after getting that sweet interest.
Over the past 10 years, inflation in India has typically been ~5% [0] and the currency has also fallen against the USD at ~4% per year [1], so I don't think this is a good idea.
[0]: https://tradingeconomics.com/india/inflation-cpi
[1]: https://www.xe.com/currencycharts/?from=INR&to=USD&view=10Y
Re: U.S. interest rates have soared everywhere but savings accounts
#53Earlier quoted context omitted.
> If you’re saving up more money (for buying a house etc), a savings account is still the best bet Open a TreasuryDirect account and buy bills, currently yielding about 50 bps for 4 weeks [1]. Or search out a high-yield online (FDIC insured) savings account, presently paying up to 80 bps [2]. [1] https://www.treasurydirect.gov/instit/annceresult/annceresul... [2] https://www.bankrate.com/banking/savings/best-high-yie…
Thanks for the recommendation! I’ve never bought bills, I will check it out. I use Marcus savings which just increased its rate from 50 bps to 60 bps yesterday. (PS: I always search for your comments in any finance-related threads as I learn a lot from them. Just an appreciation!)
You can buy CDs from a Vanguard brokerage account that are yielding about 50% more than the equivalent durations offered at gsbank/Marcus: https://personal.vanguard.com/us/FixedIncomeHome
Re: U.S. interest rates have soared everywhere but savings accounts
#54Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?
Consensus opinion seems to be that peak annual inflation already is behind us and mostly it was spectacular because of low March 2021. If inflation increases in the remainder of 2022, all the economic forecasts, and the federal reserve policy, are totally wrong.
Re: U.S. interest rates have soared everywhere but savings accounts
#55Earlier quoted context omitted.
Based on the market a lot of people believe “buy some real estate” is the solution. But that bubble IMHO is about to pop. Maybe look into interest protected bonds? https://www.treasurydirect.gov/indiv/products/prod_ibonds_gl... Personally I have been just spending what I make assuming saving is moot right now (besides 401k and espp)
I think rising interest rates should depress the value of housing. With a higher interest rate you can't afford as much principal so you start bidding on cheaper houses.
The monthly payment of 28%-38% of gross monthly pay is harder to get to with the rising interest rate and rising home prices. You’d be looking at over 50% of your net take home pay per month (yes, over half your months paycheck, especially in high cost of living areas). They are fucking pricing everyone out other than investors or existing home owners that can tap into home equity.
And rent is nearing 1900 nationwide. How is that even reality?
If people just started killing landlords and investors I personally wouldn’t give a fuck (I’m kidding, not advocating this, but that’s how bad actors these animals are).
Re: U.S. interest rates have soared everywhere but savings accounts
#56Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?
Consensus opinion seems to be that peak annual inflation already is behind us and mostly it was spectacular because of low March 2021. If inflation increases in the remainder of 2022, all the economic forecasts, and the federal reserve policy, are totally wrong.
Inflation continuing to increase doesn't necessarily mean the policy is wrong. You need to consider the counterfactual: how much would it have increased without these measures?
Re: U.S. interest rates have soared everywhere but savings accounts
#57Is this a US problem? In India you can easily get 5% interest in savings account. Maybe an opportunity to move money to Indian banks through crypto and then get it back after getting that sweet interest.
This is true in most developing countries, and generally reflects the fact that holding your money in a savings account in that country carries a lot more risk than in the US, as anyone who has been through an economic / currency crisis can tell you.
For example, banks could place limits on your ability to withdraw, or the government can limit your ability to move money out of the country, or in extreme cases, they can just force conversion to the local currency.
(This is assuming its a dollar savings account. If you're getting 5% on local currency, you're exposed to the biggest risk of all: devaluation)
Re: U.S. interest rates have soared everywhere but savings accounts
#58Clickbait 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)
> Clickbait title It's a (granted, well deserved) PR piece for Goldman Sachs. Their "popular consumer bank Marcus" is called out early for "offering individuals a yield in excess of 2%" in 2019. Its 50 bps is then compared to "Bank of America Corp.’s 0.04% or JPMorgan Chase & Co.’s 0.02%."
Would you say this speaks to the stickiness of savings accounts, in that there is no deposit account ACATS equivalent and folks won’t go through the effort of moving institutions to maximize savings returns?
Re: U.S. interest rates have soared everywhere but savings accounts
#59Earlier quoted context omitted.
> go for I-Bonds instead Series I bonds promise a 0% real yield. TIPs [1] are currently offering between 0.5% and 1.6% of real yield [2]. Plus, no cap. [1] https://www.treasurydirect.gov/indiv/products/prod_tipsvsibo... [2] https://www.treasurydirect.gov/instit/annceresult/annceresul...
Savings accounts are effectively giving you -8% right now
In US purchase power.
USD has been increasing against major foreign currencies in the last few months so there is some upside if you're planning on spending outside the US.
(For example, USD is 12% up against the euro in the last year and 20% vs the yen)
Re: U.S. interest rates have soared everywhere but savings accounts
#60Serious question: inflation seems to only be getting higher (is it 8%+ now?) the Fed's increasing of the interest rate is causing a stock market crash. So if one puts their money into assets, those are decreasing in price due to the fed, and if someone is holding cash that's also going down in value due to inflation. What's the solution?
> Fed's increasing of the interest rate is causing a stock market crash.
Citation needed.
Rate hikes were announced mid-march and I don't think you can even find that info on this chart https://finance.yahoo.com/quote/%5EDJI/
If we do see a crash soon I think it will likely be more related to major tech stocks failing to perform as expected. Of the original FAANG, F and N have both had days where there value dropped ~30% in a single day in the last six months, and that has nothing to do with interest rate hikes.