Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

331–340 of 356 posts

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

#331

Post by cheriot »

mgh2 wrote: post #252
cheriot wrote: post #244

SoFi is offering 1.25% but Vanguard's short term treasury fund (VGSH) is at 2.35% if you're ok with mild capital risk.

Be careful of Sofi, like so many IPOed to raise money from covid, their stock tumbled ~-60% YTD: https://www.google.com/search?q=sofi+stock&oq=sofi+stock&aqs... Founder's sexual misconduct: https://en.wikipedia.org/wiki/Mike_Cagney It is a known sales tactic to hook in customers betting that the hassle to switch later will keep them loyal. The 1.25% rate is if you set up direct deposit, with a $300 bonus. https://www…

The founder was pushed out years ago so is that still relevant?

High yield savings has always been about attracting customers. SoFi just got their banking charter so they want to build up deposits. The rest of the HYS crowd is around 0.5% and pocketing the difference.

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

#332

Post by adam_arthur »

azth wrote: post #40

Serious 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?

Common misconception is to avoid cash in an inflationary environment. When inflation hits hard, discount rate for assets increases commensurately which pushes down asset pricing.

Better to hold cash up until the point that the discount rate has mostly priced it in, then buy assets

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

#333

Post by toomuchtodo »

Asparagirl wrote: post #318
toomuchtodo wrote: post #270

Earlier quoted context omitted.

I bonds for children are considered irrevocable gifts, and the proceeds must be used for the benefit of the child (to do otherwise is considered tax fraud). Important context to know before purchasing.

So the same rules as UTMA accounts, yes? Except the kids’ UTMA accounts at the local bank get essentially 0% interest rates (or slightly more with long-term CD’s), while TreasuryDirect I Bonds get them over 7%. And perhaps this will also provide an incentive for the kids to not blow all their money so easily some day, when they’re of age to receive it, since the bonds if unsold will keep accumulating interest for 30…

All true. My comment was because some parents believe they can use their kids’ SSN as a strawman to buy more I bonds, not a bonafide gift to the minor.

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

#334

Post by throwoutway »

cbhl wrote: post #281
everybodyknows wrote: post #280

Earlier quoted context omitted.

For anyone who filed a 4868, and expects a refund, note that up to $5000 of it can be claimed in the form of paper I-bonds. This limit is independent of the $10000 online bond limit. There is a nuisance factor in that some portion will be delivered in small denominations -- down to $50. If you're using TurboTax, the necessary checkbox is well hidden. Look for a "more options" tab or some such, IIRC.

This seems like oddly-timed tax advice -- the filing deadline (without extensions) was Apr 18 and today is Apr 23.

You can file corrections using 1040-X

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

#335

Post by thfuran »

quintushoratius wrote: post #322
emptysongglass wrote: post #307

Earlier quoted context omitted.

Are there I-bond equivalents for us in Denmark? Watching my cash idly burn is not my idea of a good time.

I believe you can still purchase them. You're just loaning money to, and benefitting, the US government rather than your own.

You need an ssn.

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

#336

Post by ItsMonkk »

chii wrote: post #306
ItsMonkk wrote: post #100

Earlier quoted context omitted.

Well, what happened in 2008? Stocks down 50%, housing down 30%. Buying housing was a better investment than stocks. But as both were down, simply holding cash was better. But that's only because the wealthy were hedging against a hyper-inflation scenario, and that scenario didn't occur. In fact you can see this hedging as a reason for the inflation in the first place. Even things like target date funds that need to h…

But how does purchasing assets by the wealthy (what you call hedging) produce inflation? Inflation can only be produced if the demands for goods and services cannot be met and the price rises as a result. Asset price increases are not inflation. A house's price going up is not inflation. Rent going up is. A house's rent is only indirectly related to the price of the house - there's a lot more that directly affect ren…

Right, inflation is based on consumption. So home prices going up is not inflation, as homes are considered investments. So when Bill Gates becomes the world's largest private farm-owner and buys a billion dollars worth of farmland, there's no inflation there, or is there?

Bill is in it for the short-term capital holding. He's going to do what he can to make as much money as he can, but if he thinks this is just a short-term flip, no need to build a full company around this, it's not worth it. He'll rent out what he can rent, find some sub-contractors to do what they can, and the harder to rent stuff just sits there.

That's the problem here. He's one man, with many responsibilities, hoarding over what might be 4000 different lots worth $250k. He just doesn't have the attention to deal with that. So while normal farmland owners will use everything they have, now we have a bunch of land empty, and that empty land is pushing the supply demand curve of all farmland over. And that's just one man doing a one percent hedge.

This same exact issue is happening in housing, and its happening at a scale much larger than a single billionaire. I bet there are thousands upon thousands of used cars just sitting in a field somewhere. There are legitimate business that need to ensure that they can get oil or steel or lumber or whatever else they need, and the futures markets are all insane because these investors know that the recession will hit before they need to buy, and everything else will drop in proportion to these commodities.

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

#337

Post by ChrisLomont »

joe_guy wrote: post #157
ChrisLomont wrote: post #133

Earlier quoted context omitted.

GDP and USD are not the same thing. GDP measures production over a year (a timespan which is simply an artifact of our planet) in US dollars. It's a rate. USD is the sum of US dollars in use. It's an amount. Comparing a rate (defined by an arbitrary local constant) to an amount doesn't make much sense.

My googling for the sum of USD hasn't been fruitful if you don't mind providing a link. I do take issue calling an anual arbitrary. It's a very common denominator used in finances. ie, you pay taxes anually. Don't attempt to tell the government it's arbitrary. To be pedantic, everything is arbitrary, even the value, the amount of, etc of USD, invadating this entire discussion. As a society we agree upon things. A yea…

Annual is arbitrary since it's a random fact of earth. If nothing else changed except we just happened to have a 6 month year, then GDP is half, and comparisons of that rate to an amount would now be completely different.

Comparing them is like comparing gallons as a number and speed of a car as a number, and ignoring that speed in mph or km/h or m/s will give different answers. Sure there are relations, but they're not comparable as ratios.

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

#338

Post by marcosdumay »

PopAlongKid wrote: post #245
marcosdumay wrote: post #224

Earlier quoted context omitted.

> hardly soaring It's double the previous rate. I don't understand why central banks always use fixed increment sizes.

Maybe for the same reason why gasoline in U.S. is usually priced in increments of $0.10 as the performance rating goes up (although that seems to be less of a rigid rule lately where I live)? Or maybe for ease of predictability? After all it is much easier to make a binary choice between two numbers with a fixed interval between them, than to choose an intermediate value to the Nth degree.

They can use hyperbolic sized increments with the same predictability they get on constant sizes.

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

#339

Post by Thorrez »

FartyMcFarter wrote: post #301
thoughtstheseus wrote: post #209

Earlier quoted context omitted.

Closer to $1.7 trillion last I checked. “Money” is inventory for a bank. You can have too much inventory.

They can give some of it to Ukraine.

The bank's customers might not be very happy they the bank gave their money away.

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

#340

Post by MisterMower »

Spooky23 wrote: post #197
anm89 wrote: post #144

Earlier quoted context omitted.

mortgage rates have doubled in the last two months, the 20 year has doubled in the last two months, rhe policy rate had doubled in the last two months (admittedly a small nomination amount) and is about to double again in a week. so although overall rates are still low, I think it's pretty fair to say they have exploded

“Doubled” from rock bottom. The government flooded the zone with cash to keep the economy alive. Hell, I’m paying a 2.25% interest rate on my home. People are running around like chickens about inflation this and inflation that. The only meaningful metric is gas prices.

For a guy who bought a house with a loan at 2.25%, gas prices might be the only meaningful metric.

Not everybody is as lucky as you, bud. People are watching the value of their savings evaporate before their very eyes as they try to put together down payments for a home or find a minivan for their growing family.

It’s a real problem, and if you want to see what a world where it doesn’t get fixed quickly looks like, go read the book “When Money Dies.” Pretending it doesn’t exist won’t fix it either.

Post reply on HN