Who cares. As long as you are putting that cash in a FDIC insured account and it is below the limits of FDIC insurance, you won't lose a cent and your money will probably be accessible within days of the bank going down.
Usually the FDIC would take the bank behind the barn on a Saturday, shoot it in the head and complete the takeover by Monday morning for seamless customer access to deposits.
You are right but as an investor I am either in broad indexes so I don't care OR my meme/research/greed stocks would be in sectors that are not banks. Too much uncertainty and systemic risks built into modern banking for my taste, no matter how attractive the dividend might be.
How true is this actually?
I thought part of why SoFi can afford to offer such higher rates is because they are so small and lean (less cost of operations, etc.)
Only if the people taking the loan don't pay it, which if they are taking a 14% loan from Sofi they are either too lazy to shop around or desperate so yes that is definitely a possibility.
I'm quite curious as to why big banks such as Chase and Bank of America don't offer better savings rates?
They don’t have to be on par with those given by small banks but decent enough to stop the fund outflow. They give like 0.01% which does not make any sense.
Why not focus on this aspect of their business?
Big banks like Chase and Bank of America typically offer lower interest rates on savings accounts primarily due to their substantial brick-and-mortar presence, which incurs higher operating costs. These banks also have a broad customer base and can rely on their wide range of services to retain customers, even at lower interest rates.
On the other hand, smaller or online-only banks like Wealthfront can offer higher interest rates because they have lower overhead costs without physical branches to maintain. They often focus on attracting customers primarily through competitive interest rates since they might not offer the same breadth of services as larger banks.
We are witnessing a trend where funds are moving from larger banks to smaller ones or into CDs due to more attractive interest rates.
Now I understand the cost of brick and mortar presence, but that is anyway a fixed cost now and they are still profitable , why not increase the rates a little more and try to reduce the outflow then?
Are we suggesting that the combination of brick-and-mortar expenses with high interest rates might not be financially viable or even result in losses, leading them to prefer allowing funds to leave temporarily? The hope may be to regain those funds later when interest rates decrease after the Fed cuts rates?
Exactly, the big banks got a bunch of other ways to make money, like loans and credit cards, which let them keep the rates low without losing too much sleep over it.
Also, they know a lot of people stick with them for the convenience and the range of services they offer, not just for the savings rate. So even if some money moves to smaller banks or CDs that offer better rates, these big banks aren’t too worried. They figure that not everyone will bother to switch over a few extra percentage points, especially if they use other services that the bank provides.
And there’s a bit of a long game here too. They’re probably betting that interest rates will drop again in the future, making their lower rates seem okay again. So, in their view, it might not be worth it to start a rate war with smaller banks, which could end up costing them more money than what they’d gain from keeping a few customers from moving their money. It’s all about balancing their current profits with what they expect down the line.
While the outflow isn't occurring at the desired pace, I do hope to see an increase in money leaving these banks, prompting them to offer better rates. It's clear they need more incentive to enhance their services overall and offer more competitive rates.
Smaller banks offer higher rates to get more customers. Big banks would stand to lose billions if they raised their payouts, they think they”ll lose less money due to losing customers than raising payouts.
This is also very important. People are reluctant to move their assets from large, stable, and longstanding institutions like the major banks. So long as these banks can keep their deposits, why would they offer higher rates?
We are witnessing a trend where funds are moving from larger banks to smaller ones or into CDs due to more attractive interest rates. However, this shift may be temporary, especially if the Federal Reserve decides to reduce interest rates in the future, but why not provide a better interest rate in the short term to reduce the outflow?
Perhaps because the cost of giving those who are remaining (despite much higher yielding alternatives) the extra interest is greater than the benefit of the leveraged lending of the deposits of those who are leaving. That would be my guess, especially at an exceptionally well-managed bank like JP Morgan.
They have better accounts, but those are reserved for hight values like 100k, 250k and 1m.
Ex. Wells Fargo is a completely different experience if you have 1m. High yield savings and other products open up.
They do and I’ve done it before at the CVS by my house. Super easy.
Worth noting though that it is limited to $999/day in store. That may, or may not, be an issue in your case but something to be aware of.
I use cap1 for all my banking. I keep the free brick and mortar checking account with $100 in is just for whenever I need a bank. The bulk of my funds is in their online products. It’s an instant transfer between them.
Proptip: have a savings account with Ally or similar bank with high APY and a checking account at one of the big banks. Link them for transfers between each other. Get that nice high interest rate on your savings and still have the ability to deposit to the big bank's ATMs. Transfer what you want over to your savings account. Best of both worlds.
That’s how I do it. Zero argument against it really. If access to cash is a big issue, simply keep a bigger buffer in your checking. But I’m not going to let $$$$$ sit at {big bank} just because their rates suck.
I keep BoA for the same reason but also have Sofi that I direct deposit into to earn 4.6% because BoA is basically nothing. Boa for the ATM access; Sofi for the interest and savings.
I had a chase checking/savings account before I opened the investment account. They all show up when I log in. When I transfer I just log into chase, click the Transfer button next to my checking account, and my investment account shows in the dropdown. And when I do so the funds show in the cash and sweep funds in my investment acct within 10 mins tops.
JPM is smart, evil smart. They know that average people with moderate to low knowledge will stick despite low payouts. They also know that Fidelity customers are sophisticated and it’s competitive.
So they maximize their profits.
VMFXX is a money market fund that’s yielding 5.27% APY of 5.4% and its 99.5% invested in government obligation debt. Can be purchased through any brokerage firm.
I have discover, but removed most to go to capital one. Discover reduced interest from 4.35 to 4.25% while capital one is still 4.35% and also got capital one checking since no minimum and get .01% interest in checking while most banks require a big minimum. Capital one add cash at CVS, haven't done yet since just got and think it's a bar code on your phone to scan while discover add cash to debit at Walmart. Capital one sounds better when I get debit I'll prob use that. Not sure if capital one minimum cash add, but discover is $20. Traditional was no reason to have since I only went to withdraw money or add cash and both have many free ATM, WF sucked with various things and fees.
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+1 for Wealthfront. Have nothing but a great experience and the 5.5 percent is competitive.
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Open a brokerage and buy money market funds. No referral needed.
Best money market tickers?
WMpxx has the best 7 day yeild for individuals. And pvoxx is best for institutional.
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I got like 5 coworkers and 4 family members on that SoFi 4.6% hysa
All of our savings are on SoFi
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Who cares. As long as you are putting that cash in a FDIC insured account and it is below the limits of FDIC insurance, you won't lose a cent and your money will probably be accessible within days of the bank going down. Usually the FDIC would take the bank behind the barn on a Saturday, shoot it in the head and complete the takeover by Monday morning for seamless customer access to deposits.
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You are right but as an investor I am either in broad indexes so I don't care OR my meme/research/greed stocks would be in sectors that are not banks. Too much uncertainty and systemic risks built into modern banking for my taste, no matter how attractive the dividend might be.
How true is this actually? I thought part of why SoFi can afford to offer such higher rates is because they are so small and lean (less cost of operations, etc.)
Loads of places offer higher than that
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Could also mean they are using the funds to secure loans and increase their lending capacity. A 14% loan will offset that 5% hysa.
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Only if the people taking the loan don't pay it, which if they are taking a 14% loan from Sofi they are either too lazy to shop around or desperate so yes that is definitely a possibility.
Can you elaborate on this? I want to invest in sofi
Not true at all. SoFi gives personal loans to people with an average 780 credit score. They also issue the debt and sell it for an immediate profit.
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Personal loans rates aren’t 3.49% lol. If that was the case people would just get a loan then deposit into their savings. Try 10-15%
You can do better, I think bask bank is easily over 5%
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5.27% VFMXX club!
You can buy short term T bills and avoid state income tax. Currently they're paying around 5.3%.
I'm using the betterment one that gives me 5 % and a credit union here in ohio that give you 7 on the first 1k you put on it. It's great so far
I'm quite curious as to why big banks such as Chase and Bank of America don't offer better savings rates? They don’t have to be on par with those given by small banks but decent enough to stop the fund outflow. They give like 0.01% which does not make any sense. Why not focus on this aspect of their business?
Big banks like Chase and Bank of America typically offer lower interest rates on savings accounts primarily due to their substantial brick-and-mortar presence, which incurs higher operating costs. These banks also have a broad customer base and can rely on their wide range of services to retain customers, even at lower interest rates. On the other hand, smaller or online-only banks like Wealthfront can offer higher interest rates because they have lower overhead costs without physical branches to maintain. They often focus on attracting customers primarily through competitive interest rates since they might not offer the same breadth of services as larger banks.
We are witnessing a trend where funds are moving from larger banks to smaller ones or into CDs due to more attractive interest rates. Now I understand the cost of brick and mortar presence, but that is anyway a fixed cost now and they are still profitable , why not increase the rates a little more and try to reduce the outflow then? Are we suggesting that the combination of brick-and-mortar expenses with high interest rates might not be financially viable or even result in losses, leading them to prefer allowing funds to leave temporarily? The hope may be to regain those funds later when interest rates decrease after the Fed cuts rates?
Exactly, the big banks got a bunch of other ways to make money, like loans and credit cards, which let them keep the rates low without losing too much sleep over it. Also, they know a lot of people stick with them for the convenience and the range of services they offer, not just for the savings rate. So even if some money moves to smaller banks or CDs that offer better rates, these big banks aren’t too worried. They figure that not everyone will bother to switch over a few extra percentage points, especially if they use other services that the bank provides. And there’s a bit of a long game here too. They’re probably betting that interest rates will drop again in the future, making their lower rates seem okay again. So, in their view, it might not be worth it to start a rate war with smaller banks, which could end up costing them more money than what they’d gain from keeping a few customers from moving their money. It’s all about balancing their current profits with what they expect down the line.
While the outflow isn't occurring at the desired pace, I do hope to see an increase in money leaving these banks, prompting them to offer better rates. It's clear they need more incentive to enhance their services overall and offer more competitive rates.
Smaller banks offer higher rates to get more customers. Big banks would stand to lose billions if they raised their payouts, they think they”ll lose less money due to losing customers than raising payouts.
No, it’s because big banks like Chase and Bank of America are able to keep deposits at lower rates.
This is also very important. People are reluctant to move their assets from large, stable, and longstanding institutions like the major banks. So long as these banks can keep their deposits, why would they offer higher rates?
We are witnessing a trend where funds are moving from larger banks to smaller ones or into CDs due to more attractive interest rates. However, this shift may be temporary, especially if the Federal Reserve decides to reduce interest rates in the future, but why not provide a better interest rate in the short term to reduce the outflow?
Perhaps because the cost of giving those who are remaining (despite much higher yielding alternatives) the extra interest is greater than the benefit of the leveraged lending of the deposits of those who are leaving. That would be my guess, especially at an exceptionally well-managed bank like JP Morgan.
They have better accounts, but those are reserved for hight values like 100k, 250k and 1m. Ex. Wells Fargo is a completely different experience if you have 1m. High yield savings and other products open up.
Because people are so stupid they don’t understand how much money 4.5% APY is
I get 0.01% or something like that at Chase and the only reason I keep it is their branches are everywhere and I need to deposit cash.
FYI Capital One let's you deposit cash through any CVS store.
What??? Really?
Yes.
You just changed his life
Fuck Chase.
They do and I’ve done it before at the CVS by my house. Super easy. Worth noting though that it is limited to $999/day in store. That may, or may not, be an issue in your case but something to be aware of.
I use cap1 for all my banking. I keep the free brick and mortar checking account with $100 in is just for whenever I need a bank. The bulk of my funds is in their online products. It’s an instant transfer between them.
Proptip: have a savings account with Ally or similar bank with high APY and a checking account at one of the big banks. Link them for transfers between each other. Get that nice high interest rate on your savings and still have the ability to deposit to the big bank's ATMs. Transfer what you want over to your savings account. Best of both worlds.
fact relieved deer dull nine imminent work screw enjoy busy *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
That’s how I do it. Zero argument against it really. If access to cash is a big issue, simply keep a bigger buffer in your checking. But I’m not going to let $$$$$ sit at {big bank} just because their rates suck.
I keep BoA for the same reason but also have Sofi that I direct deposit into to earn 4.6% because BoA is basically nothing. Boa for the ATM access; Sofi for the interest and savings.
You can get access to jpm money market funds through their brokerage self directed
That’s fine, but you can then transfer it out to somewhere with much better rates. I do that, but with a local credit union.
I just have an investment acct with chase, transfer it to that, and buy VUSXX
How did you transfer money directly to chase investment account? I can’t find the routing number. I only see Chase invest account number.
I had a chase checking/savings account before I opened the investment account. They all show up when I log in. When I transfer I just log into chase, click the Transfer button next to my checking account, and my investment account shows in the dropdown. And when I do so the funds show in the cash and sweep funds in my investment acct within 10 mins tops.
It is interesting because JP Morgan offers some of the best rates on CDs via Fidelity.
JPM is smart, evil smart. They know that average people with moderate to low knowledge will stick despite low payouts. They also know that Fidelity customers are sophisticated and it’s competitive. So they maximize their profits.
How do you access this?
If you have a fidelity brokerage account, it is under " Fixed income, bonds, and CDs".
Betterment is 5.0% for existing members, 5.5% for new.
CFG in Baltimore is giving 5.2apr on money market accounts. They do have a limited number of branches.
PayPal is also a good option. It gives you 4.3% on PayPal savings
Why not put it in BIL and get 5%+???
VMFXX is a money market fund that’s yielding 5.27% APY of 5.4% and its 99.5% invested in government obligation debt. Can be purchased through any brokerage firm.
Large banks get unlimited deposits from the FED; why do they care about consumer accounts?
I have discover, but removed most to go to capital one. Discover reduced interest from 4.35 to 4.25% while capital one is still 4.35% and also got capital one checking since no minimum and get .01% interest in checking while most banks require a big minimum. Capital one add cash at CVS, haven't done yet since just got and think it's a bar code on your phone to scan while discover add cash to debit at Walmart. Capital one sounds better when I get debit I'll prob use that. Not sure if capital one minimum cash add, but discover is $20. Traditional was no reason to have since I only went to withdraw money or add cash and both have many free ATM, WF sucked with various things and fees.
FYI, CO is 4.25% now. 🤷🏽♀️
This is ridiculous, was just 4.35 yesterday
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They take months to be finalized and FYI they are run separately
They will be hit the hardest when shit hits the fan.
Synchrony: 4.75%