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interest rates on savings accounts [...] in the UK [are] competitive with government bonds. Looking at the rates for UK government bonds, it looks like those a
by uiri 10y ago
interest rates on savings accounts [...] in the UK [are] competitive with government bonds.
Looking at the rates for UK government bonds, it looks like those are also below inflation (e.g 5 year yields are around 0.6%). If there were any savings accounts paying above inflation, I think exchange rates would be shifting accordingly in the absence of capital controls. I suspect that savings accounts representing a poor RoI is therefore a global phenomenon.
The only thing which I can think of that the parent could be referring to is the money market. I think I'm as lost as you as to what he is getting at.
- soVeryTired 10y agoI'm really talking about retail savings accounts: most banks in the UK pay give 2%-3% on deposits up to a cap, with no interest paid on funds deposited above the cap. However, it's often possible to get around the cap by opening multiple accounts. You can stash amounts into the mid tens of thousands like this, but for higher values it gets a bit trickier. These are retail products. It's true that an increase in the yield on government bonds would move the exchange rate, but the kind of institutional investors that move money in enough bulk to affect an exchange rate have little interest in retail deposit accounts.