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EducatorReasonable51 t1_jeemvv5 wrote

Reply to comment by Durumbuzafeju in "No REALLY, we're doing fine" ~ every bank right now by JPowsSecretlover

Who wants to park cash at .5% at your bank when you can park it at 4%+ in money market accounts or bonds and 5%+ in a medium term CD?

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markgriz t1_jeez3gp wrote

If your bank is paying you 0.5% on your cash, find a better bank.

Capital One is currently paying 3.4% on their savings accounts. Discover is paying 3.5

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Trest43wert t1_jefj29b wrote

This is a big part of the story - many banks can't pay more than 0.5% interest because the money from their deposits are locked up in low interest loans from the past. Their overall portfolio may average 2% given that they had to sell recent bonds to fund outflows to money markets. Basically, bank holdings have dwindled to the assets with shit yield and they are trying, and failing, to pass that shit yield to grandma's savings account. Grandma aint having it so they sell more assets. Spiral ensues.

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Chishuu t1_jef1pjl wrote

UFB is paying 5.02%

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markgriz t1_jef2wmv wrote

I saw that. Read the reviews, sounds like a nightmare

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Chishuu t1_jef5acl wrote

How so? Seems to be solid

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ItsDijital t1_jefddsq wrote

Ally has a no penalty CD at 4.75% 4.35%

https://www.ally.com/bank/no-penalty-cd/

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Chishuu t1_jeg1xaj wrote

Yes, but there’s a 18 month hold. And there are penalties for withdrawing early. And it’s 5%.

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ItsDijital t1_jeg5r55 wrote

No, the minimum holding time is like 6 days. That's what makes it "no penalty".

Edit: it's 4.35% now

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Chishuu t1_jeg73es wrote

Ah, I didn’t see the no penalty link. Thanks.

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mogarottawa t1_jefoixd wrote

This is just a dumb take. Anyone who had 100k+ cash would not be sitting on 100k+ cash unless they need to use it in the short term. People who have 100k + ash are not dumb enough to not invest that money if they don't need it. Anyone sitting on 10k or less cash is not going to bother buying bonds. This mythical millions of people who has been holding a lot of cash in their bank account story is just BS.

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