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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

#231

Post by Rapzid »

loeg wrote: post #221
JumpCrisscross wrote: post #84

Earlier quoted context omitted.

> there is no deposit account ACATS equivalent There sort of is: wires and EFTs. The simple answer may be, for many savers, the spread is irrelevant. If you're saving for a home over a year [1], the difference between earning zero and 80 bps on e.g. $100,000 (quarter of the median home sales price [2]) is no more than $800. If these are your only savings, having them at an institution you know and trust may be worth…

Right now I-bonds are a pretty compelling down payment savings vehicle, at least for your first ~$15k/year, if your timeline is more than one year out.

If you have a tax refund for that last 5k right?

Regardless it's per individual. So if married everyone make sure to double up!

Re: U.S. interest rates have soared everywhere but savings accounts

#232

Post by Consultant32452 »

gdurham wrote: post #77

The issue is that there is no incentive for banks to increase interest rates on accounts as they are already sitting on too much cash. Banks make money by lending money out, in times where banks are strapped for cash on hand, you will see interest rates increase. I don’t see this changing in the near future.

Yep, the reserve rate has been at 0% for years. Bump that back up and watch savings interest skyrocket.

Re: U.S. interest rates have soared everywhere but savings accounts

#233

Post by wallacoloo »

FabHK wrote: post #229
wallacoloo wrote: post #219

Earlier quoted context omitted.

> > would convert a some portion of my savings into stablecoins > This is probably the worst choice one can make. It's accepting a 0% nominal yield against an unregulated counterparty. A Bank of America savings account is literally a better choice. you clipped out half the sentence: > I would convert a some portion of my savings into stablecoins and spread them out into some interest accounts to try to minimize count…

And have credit risk against some untested crypto-startup without FDIC deposit insurance?

yes.

i'm not taking any stance on the risk v yield profile. i was just bothered by JumpCrisscross's mischaracterization of the earlier comment & wanted to correct that.

Re: U.S. interest rates have soared everywhere but savings accounts

#234

Post by throw123123123 »

NaturalPhallacy wrote: post #212
jpgvm wrote: post #174

Earlier quoted context omitted.

Some of it was re-instated with Dodd-Frank but ultimately I think it was insufficient, a return to Glass-Steagall would be a more ideal world for banking but will probably never happen in America as it stands today.

America will fall before the banks let the government regulate them in any meaningful way.

Banks are so regulated that you can't open an account in the US unless you visit a bank branch physically.

Re: U.S. interest rates have soared everywhere but savings accounts

#235

Post by ericd »

marcosdumay wrote: post #222
ericd wrote: post #179

Earlier quoted context omitted.

Someone betting that we'll hit a deflationary recession/crash where inflation will plummet along with interest rates, making their locked in interest rate advantageous?

Is the interest banks pay on deposit locked in any way (on the US)? I got the impression it changed month to month.

It's not, unless you have a CD with them. But T-Bills have a fixed implied interest rate for the term.

Re: U.S. interest rates have soared everywhere but savings accounts

#236

Post by Asparagirl »

Rapzid wrote: post #231
loeg wrote: post #221

Earlier quoted context omitted.

Right now I-bonds are a pretty compelling down payment savings vehicle, at least for your first ~$15k/year, if your timeline is more than one year out.

If you have a tax refund for that last 5k right? Regardless it's per individual. So if married everyone make sure to double up!

Trusts, LLC’s, and other businesses can also open up “entity accounts” at TreasuryDirect under their EIN’s, for buying up to $10k of I Bonds per year, or other types of treasuries.

And those of us with kids under eighteen years old can open up “linked” minor sub-accounts in their names, which are linked to the parent’s primary account at TreasuryDirect but which can buy up to $10k of I Bonds per year in each child’s name.

At some point, spinning up some new LLC’s and/or offspring just to get more access may become advantageous.

Re: U.S. interest rates have soared everywhere but savings accounts

#237

Post by mgh2 »

JumpCrisscross wrote: post #39
Rastonbury wrote: post #10

Clickbait 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%."

Yes, it may very well be an advert for Marcus. A product marketing manager's next steps in the AIDA sales funnel would be:

A - Attention: This piece highlights the context and problem at hand to the general population. Priming them with major player's brands is key to awareness.

I - Interest: Will follow up with a piece titled "Marcus considers rising interest rates amid inflation" comparing the highest interest rates with competitors. This anticipation and speculation creates further interest.

D - Desire: Finalize with "Marcus decides to raise interest rates to 1.3%" higher than other competitors to "stay competitive".

A - Action: Announce a "limited time offer" to further entice people to open an account - ex: $100 cash for new accounts.

https://en.wikipedia.org/wiki/AIDA_(marketing)

Re: U.S. interest rates have soared everywhere but savings accounts

#238

Post by reificator »

throw123123123 wrote: post #234
NaturalPhallacy wrote: post #212

Earlier quoted context omitted.

America will fall before the banks let the government regulate them in any meaningful way.

Banks are so regulated that you can't open an account in the US unless you visit a bank branch physically.

This is clearly not true given the number of banks with no physical branches.

Re: U.S. interest rates have soared everywhere but savings accounts

#239

Post by rrrrrrrrrrrryan »

mise_en_place wrote: post #196
BayAreaEscapee wrote: post #189

Earlier quoted context omitted.

The obvious problem is that there is nowhere to hide. All markets are overvalued by virtually any historical metric. At least if you take the -6% real hit, at least you can know and predict what the hit is.

My portfolio with foreign value stocks and gold and silver mining stocks, plus oil companies is doing great. I am up by more than 10%. This is just the beginning for them. My financial advisor who manages the vast majority of my wealth is down 2% in comparison. I'm close to pulling my money because he's extremely anti commodities and I had to yell at him to invest my money into mining companies because he thinks it's…

I think oil is a moderately risky bet on future geopolitical-economic turmoil, which is far from guaranteed, but your other bets are much more conservative.

How are you invested in "foreign value stocks"? (e.g. are there certain funds / ETFs? Individual stocks?)

Re: U.S. interest rates have soared everywhere but savings accounts

#240

Post by Asparagirl »

ericd wrote: post #90
JumpCrisscross wrote: post #74

Earlier quoted context omitted.

> TIPS don't seem to have a rate that would protect me from inflation The TIP yield is a real yield. It's indexed to CPI-U, same as Series I bonds. (TIPs adjust monthly; Series I bonds semiannually.) > would convert a some portion of my savings into stablecoins This is probably the worst choice one can make. It's accepting a 0% nominal yield against an unregulated counterparty. A Bank of America savings account is li…

This. Also, max put your Series I allocation ($10k/yr/SSN iirc, must be purchased from TreasuryDirect) before bothering with TIPs. If you have kids, the inflation adjustments can be used tax free for educational expenses, which would already make them the best inflation adjusted bond, but on top of that, you can cash it in whenever you want for nominal value rather than selling them on the secondary market, which mak…

It’s $10k/yr/EIN, too. So if you perhaps have a family trust or a single-member LLC, disregarded on your taxes as Schedule C, that LLC or Trust can create an “entity account” at TreasuryDirect. It has slightly stricter restrictions than an account for a natural person, but certainly has the ability to purchase and hold and sell Treasuries too, including I Bonds.
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