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I know of no such bank offering interest rates even close to that. You're talking 2.5% - 5%. That's unheard of these days. At my current bank, $1M in a money ma

by schammy 16y ago

I know of no such bank offering interest rates even close to that. You're talking 2.5% - 5%. That's unheard of these days. At my current bank, $1M in a money market account would generate about $2,500/year, which is nothing short of insulting. Who are these fabled banks offering 10x the interest rate?

barrkel 16y ago
Indeed, (relatively) risk-free interest rates available for modest amounts of money currently do not exceed the rate of inflation; money in the bank is money declining in value.
artmageddon 16y ago
Before the subprime crash in 2007, interest rates were well in that range. I had an ING savings account(regular savings account, not a CD) with a rate that was earning me $7 per day, as opposed to now in which I get maybe $2 per month.
- schammy 16y ago
  Yeah, I know, interest rate used to be good. I used to get 5% on my emigrant direct savings account. Now it's 1%, and I don't know of anything higher (for a money market account anywys)
yummyfajitas 16y ago
ING Direct gives you 110bps, 125bps fixed rate if you are willing to tie up your money for at least 2 years. Several other internet-only banks will do the same. As for 250-500bps, I have no clue where to get that. Maybe he meant you can get 5% with a S&P ETF?
jeremymims 16y ago
Just a quick search shows me 2.39% for 100k in a 5 year cd. (I can think of any number of reasons you might not want to do this.) I'm guessing for a million you could do better. Perhaps you'd only be at the lower bound of the numbers I gave but the point still stands that compound interest is what is making the rich richer.
oostevo 16y ago
I think your mistake is in assuming that he meant a standard, FDIC-insured savings account by "in the bank." It's not terribly hard to find ~5% dividend yields in the stock market, particularly if you look outside the United States. Further, in the US, once you have a net worth of a million dollars, you qualify as an accredited investor, opening up a plethora of new investment opportunities to you.[1] [1] http://en.wikipedia.org/wiki/Accredited_investor http://en.wikipedia.org/wiki/Accredited_investor
xmr 16y ago
a close friend just put away ~$2.5M for a year and is only getting 1.25%. They're more concerned with stability/low risk than growth.
jacques_chester 16y ago
> Who are these fabled banks offering 10x the interest rate? As usual it depends on country. In Australia the standard savings rate is around 4% at the moment. I can go to my bank and get 6.2% PA term deposits on a 7 month term.
mturmon 16y ago
California state bonds are in this vicinity. Rates of return vary. Tax-exempt.

by schammy 16y ago

barrkel 16y ago

Indeed, (relatively) risk-free interest rates available for modest amounts of money currently do not exceed the rate of inflation; money in the bank is money declining in value.

artmageddon 16y ago

Before the subprime crash in 2007, interest rates were well in that range. I had an ING savings account(regular savings account, not a CD) with a rate that was earning me $7 per day, as opposed to now in which I get maybe $2 per month.

schammy 16y ago
Yeah, I know, interest rate used to be good. I used to get 5% on my emigrant direct savings account. Now it's 1%, and I don't know of anything higher (for a money market account anywys)

yummyfajitas 16y ago

ING Direct gives you 110bps, 125bps fixed rate if you are willing to tie up your money for at least 2 years. Several other internet-only banks will do the same. As for 250-500bps, I have no clue where to get that. Maybe he meant you can get 5% with a S&P ETF?

jeremymims 16y ago

Just a quick search shows me 2.39% for 100k in a 5 year cd. (I can think of any number of reasons you might not want to do this.) I'm guessing for a million you could do better. Perhaps you'd only be at the lower bound of the numbers I gave but the point still stands that compound interest is what is making the rich richer.

oostevo 16y ago

I think your mistake is in assuming that he meant a standard, FDIC-insured savings account by "in the bank." It's not terribly hard to find ~5% dividend yields in the stock market, particularly if you look outside the United States. Further, in the US, once you have a net worth of a million dollars, you qualify as an accredited investor, opening up a plethora of new investment opportunities to you.[1] [1] http://en.wikipedia.org/wiki/Accredited_investor http://en.wikipedia.org/wiki/Accredited_investor

xmr 16y ago

a close friend just put away ~$2.5M for a year and is only getting 1.25%. They're more concerned with stability/low risk than growth.

jacques_chester 16y ago

> Who are these fabled banks offering 10x the interest rate? As usual it depends on country. In Australia the standard savings rate is around 4% at the moment. I can go to my bank and get 6.2% PA term deposits on a 7 month term.

mturmon 16y ago

California state bonds are in this vicinity. Rates of return vary. Tax-exempt.