8 ms·
Online only banks offer great rates on savings accounts. The Fed has an influence but these rates are market driven. If you want high rates, look for them and p
by formercoder 6y ago
Online only banks offer great rates on savings accounts. The Fed has an influence but these rates are market driven. If you want high rates, look for them and put your money there. Many financial products are only available to the wealthy but in this case anyone can do this.
- mfer 6y agoOnline only banks have fewer expenses (no branches or staff in them). This appears to translate into higher rates which is a selling point for them.
- smoe 6y agoI think traditional banks, which apparently used to have much better rates even with all the expenses, have found that people are perfectly willing to give them their money practically for free. The newer online competeritors need something to draw in costumers.
- garmaine 6y agoSavings account rates are terrible compared with alternative investments though, even cash-storage investments.
- zdkl 6y agoCould you give some examples, adjusting for risk?
- Aunche 6y agoNo penalty CDs are strictly better than savings accounts. I was able to lock my emergency savings into a 1.6% CD the day the Fed announced rates cuts.
- formercoder 6y agoWhy are they strictly better? You remove interest rate risk at the expense of yield. They currently pay less than high interest savings.
- Aunche 6y agoWhenever I looked at them last year, they were always slightly higher yield than the online savings accounts. Perhaps it was just a promotional rate.
- formercoder 6y agoI’m not aware of anything with that risk / liquidity profile which pays better? In fact theoretically there shouldn’t be anything.
- NovemberWhiskey 6y agoWell, that sort of depends on how you value FDIC insurance.
- formercoder 6y agoNot any higher than SIPC
- throwaheyy 6y ago- High yield savings accounts - CDs - Money market accounts All pay much higher than a typical megabank savings account and are equally as safe.
- formercoder 6y agoSorry i meant better than high yield savings.
- throwaheyy 6y agoBond ETFs are right now around 2% yield with slightly higher risk than a savings account