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

201–210 of 356 posts

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

#201

Post by WalterBright »

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…

If you're telling your financial advisor what to invest in, what's the point in having one?

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

#202

Post by pishpash »

Why is this surprising? Overnight rates are still 0.25%, and 1-month bills are 0.46%. Online savings accounts are at 0.6-0.65% now and have not fallen below 0.5% the whole pandemic. The oddity is why they've not fallen to 0% before, but that is because there is an effective duration of savings which may have been shortening recently as rates rise.

As for brick-and-mortar banks still at 0%, going by their low-balance fees, 0.5% probably only covers their overhead, if that.

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

#203

Post by john_moscow »

Why would they? If there were many small banks competing with each other for the consumer's money, the free market mechanics would have quickly brought the interest rates up.

But hey, who needs competition. Let the banking sector be run by a bunch of buddies that go to the same golf club, and if they cock up, they can always schmooze the regulator to give out a hefty bailout package. Who would have thought the consumer will get screwed?

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

#205

Post by 0xbadcafebee »

clairity wrote: post #129
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.

> "...there is no incentive for banks to increase interest rates on accounts as they are already sitting on too much cash." and folks wonder why banks are so strictly regulated... no, banks are never sitting on too much cash unless they've made a marketing and/or an operational error. most banks are highly levered, meaning they're lending out, say, 10× the cash they hold, so they never "have too much cash on hand". q…

> functioning markets are by definition competitive

Depending on your definition of 'competition' and 'functioning'. There are markets that aren't competitive but are functioning, and markets that are competitive but aren't functioning.

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

#206

Post by okaram »

mise_en_place wrote: post #166

Real interest rates are still negative, with inflation being at 9%. So even if the yield is 3%, on the 5 year treasury, the real yield is -6%. What fool would lend someone 100 dollars to get back 94 dollars in 5 years? The biggest sucker is the person who owns a 30 year treasury, and if the Fed starts selling its treasuries, good luck getting a reasonable price for it.

Real interest rates were negative, unless you expect prices to be 9% higher than now next year

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

#207

Post by olliej »

When I first moved to the US I was setting up my first US bank accounts.

The credit union bragged about how high there savings account interest rates were. My honest reply was to say I was surprised they gave monthly rather than annual interest rates. When they corrected me to say that it was the annual interest rate I laughed, this was a savings account with fees even.

Unsurprisingly the interest rates on everything other than mortgages was in line with those in NZ. Mortgage rates were vastly lower, but 4 or so years later the economy collapsed due to terrible mortgage practices.

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

#208

Post by MrFoof »

icelancer wrote: post #188
flatiron wrote: post #43

Earlier 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-Bonds are getting a lot of attention lately, and with good reason. Still underexplored, and there's a cap on them ($10k/person with limited workarounds), but well worth checking out for everyone reading this.

Moreover, if you think the current 7.12% yield is great, if you look at the recently released CPI numbers it may be adjusted to 9.62% in May.

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

#209

Post by thoughtstheseus »

pmalynin wrote: post #194
clairity wrote: post #129

Earlier quoted context omitted.

> "...there is no incentive for banks to increase interest rates on accounts as they are already sitting on too much cash." and folks wonder why banks are so strictly regulated... no, banks are never sitting on too much cash unless they've made a marketing and/or an operational error. most banks are highly levered, meaning they're lending out, say, 10× the cash they hold, so they never "have too much cash on hand". q…

There is literally a trillion dollars too much in cash in banks right now. All of that money just sits in reverse-repo with the Fed. So I don’t know how you’re claiming that banks aren’t sitting on too much cash?

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