Topic: Savings/CDs (Read 929 times)

For a somewhat "traditional" reply...

Banks and CUs primarily spend what used to be interest on free or subsidized services, and CUs tend to be more expensive if you use them "unusually." For example, if I want a bank statement from them, it costs $5/month to have them print it out, they started refusing outgoing international wires last year, and charge me a fair amount for things like checkbooks. Rates in savings and CDs there usually match maybe half "real" USD inflation.

Banks, OTOH, offer practically no interest (and usually charge you after fees) but tend to have more features (like mobile banking, no-fee and instant intra-bank transfers, and permitting outgoing international wires). Often, their services are more heavily-subsidized or free, but definitely not always.

It needs to be compared case-by-case. Some credit unions participate in Shared Branching, which is absolutely awesome, allowing instant no-fee transfers if the other person also has a CU participating in Shared Branching. A good many do, but a good many do not, too.  They've started requiring the recipient's last4 SSN, though, which is ridiculous. It may also be worth considering whether or not you believe you'll have a little more "spirit of the law" dealing with regional or even local CUs over corporate banks, which I've found tend to be very "letter of the law" and unwilling to budge on anything. They'll tell you owe them $150 for whatever bogus reason, and fuck you if you disagree. For that reason alone, I'll always stick with my local CU, with staff always happy to act human for me.

No matter what, though, banks and credit unions are where your savings go to die, and nobody should keep large sums of money there unless they're dying and want to "lock in." Their role these days is largely limited to bill paying, bill paying, and bill paying. I don't see any reason to favor bank/CU IOUs over cash for savings, and would suggest Americans favor "real" investments considering CDs usually have negative adjusted return expectations these days.

Fwiw ETA: it's been a while since I've read Mish, but IIRC, service overhead expenses tend to cost something like 1.75-3% of deposits, annually, which would've otherwise been interest you'd be accruing for dirt-basic service. Banks tend to be on the higher side of that range, while CUs are in the lower side. Interest rates have been sliding down fast, but banks and CUs tend to offer many more services these days... mobile banking, instant/free intra-bank or inter-CU transfers, online account management, free debit cards, etc

Where are you finding 4-6%?

Chase's top CD (10 year or 120 month) pays 0.90% APY
Bonds are handled by the government, not by a bank, and theirs are:

Type I: 1.94% APY
Type E/EE: 20 years for 100%, or around 3.5X% APR if we're basing it on compounding (I really don't want to do this math right now)

I'm seeing nothing even close to 6% anywhere, so please elaborate on what you're talking about. And holding your money for 20 years for 3.5% is a bit overkill. If we want to add in inflation to that, you're going up around 70% over that period, meaning the actual APY is really more like 2.6%.

contact chase or fidelity and inquire about investing in bonds you can get 4-6%

netspend pre-paid card also has an optional savings account with 5%

So far it sounds like investing all into BTC is a better idea than getting a savings account.

Well hopefully before that appears the smarter people will have moved the money out to a safe location.
Depends on the banking system used though

I saved CDs for a while, Im making a cd disc shooter so I can have unlimited ammo, has anyone ever made one of these before?

I don't see Bitcoin resolving this problem though. I know what hyperinflation is. I just don't view it as being a situation where we're going to hit a high inflation period and people are going to flood into cryptos. That seems pretty far-fetched.

It's not paranoia, you've got some research to do on hyperinflation

The vast majority of the world still uses fiat. As long as this continues, banks are safe. They won't magically lose money; that's what FDIC is for. Think about it this way: if 99.9% of the world is still using fiat (well, 100% since barely anyone uses just cryptos), it is still king. If it magically disappeared, ALL finances would disappear so cryptos would be worthless as well. Being paranoid doesn't solve anything.

It depends on the coin of course and crpytocurrencies are high risk, I don't dispute that, but I'd never leave a substantial amount of money with a bank in this day and age lol Not unless they had something special backing them. The thing is, anything in the market could 'drop suddenly and lose its value' people just need to decided the return is worth the risk or not, that's how free markets work in general.

A coin that earns 10000% APY means nothing if its value is dropping at the same speed or more. Just because a coin is PoS doesn't mean it's profitable. You're better off just buying into BTC and rolling with it, as investing in the altcoins just brings about another point of failure.

Buy Hobonickels and other PoS ( proof of stake ) coins instead, seriously, putting money in a savings account that can get frozen or the company go bust in a year or two is very risky, all banks are going to keep their interest rates below 1% forever until they either go bankrupt or their governments collapse because they rely on gullible or unreliable borrowers in order to make money.

Hey, I'm in TX as well!

Credit unions are definitely the way to go. The interesting part about this is that years ago (8 or so I guess) CUs were paying lower interest for me than other banks were. I still don't get why there's such a big difference between the two though, being that everyone can join either.

There's no way anyone pays 10% right now.  30 year muni is only at 5%

An interest rate of 0.01% is really crazy, I've never seen any below 0,5% in my country.
Btw just holding bitcoins I have had an amazing return, put your money into btc not in the banks!

My highest interest bank account went from 4.5% (in 2005) down to 0.5% now. My old "main" bank account went from 1.5% down to 0.01%.

To put it into perspective, if you had $10k in the bank:

2005: $37.50 a month interest
Now: $0.08 a month interest

A difference of $37.42.

This is why I would rather deal with Bitcoin. Even a 0.02% interest rate is better than what I get in the bank. The only alternative is to use one that's not local (at 0.06-0.5%) which is a hassle and still nets almost nothing. That $10k, at 0.5%, is $4 a month.

Yea they do appear to be crazy low from those links you showed.  Good thing we are in Bitcoins! Lol

-edit-  

for shits and giggles I looked up my credit union.

BofA savings .01%
My Credit union savings .10% - .25%

https://www.cuoftexas.org/rates.php#checking-and-savings-tab

That's a hell of a difference.

Seriously, call them. They will tell you what I just did. Or just don't believe it, that's up to you.

Or you're not in the US (which would also make sense, as anyone in the US can tell you that the interest rates are ridiculously low here at the moment. Even savings bonds were 0.01% a year or two ago for one of the series, but those have gone up slightly).

Edit: here's another one from BoA (this is their CD's):

https://www.bankofamerica.com/deposits/bank-cds/risk-free-cd-rates.go

$5,000 minimum opening depositFootnote1
0.04% interest rate on all balancesFootnote 1
9-month term

Notice something? Yeah, it's just barely above that of the savings accounts. That or they want people to lock in CD's at a little over 1% of the interest rate of liquid savings accounts. You really need to learn how to read numbers, :p.

I seriously hope you're joking.

Here's one for BoA just taken (this is their highest interest account):

 Platinum Money Market Savings†
   Platinum    
   Rate(%)    APY(%)†   
Less than $10,000    0.03    0.03    
$10,000 - $19,999    0.03    0.03    
$20,000 - $29,999    0.05    0.05    
$30,000 - $39,999    0.05    0.05    
$40,000 - $49,999    0.05    0.05    
$50,000 - $99,999    0.05    0.05    
$100,000 - $249,999    0.08    0.08    
$250,000 and over    0.10    0.10

https://www.bankofamerica.com/deposits/bank-account-interest-rates.go

Here's one for Regions:

RATES
Balances   Interest Rate   Annual Percentage Yield
$50,000.00 or more    0.01%   0.01%
$25,000.00 - $49,999.99    0.01%   0.01%
$10,000.00 - $24,999.99    0.01%   0.01%
$2,500.00 - $9,999.99    0.01%   0.01%
$0.00 - $2,499.99    0.01%   0.01%

http://www.regions.com/Rates.rf


Yes, I was being serious. It's pretty sad. $1300 in the Region's account nets a whole $0.01 (yes, one cent) a month in interest.

Most banks here are 0.01%, but as stated, a few are 0.06-0.5

I doubt anyone would have rates between 1/2 a percent (0.5%) and six hundredth of a percent (.06%).  That's not even logical.

Do you mean between .5% (.005) and 6% (.06)?