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Can anyone explain to me how they are able to offer 3% when 1 year treasury notes are less than 3% right now? If they use longer term bonds, they will face pot

Can anyone explain to me how they are able to offer 3% when 1 year treasury notes are less than 3% right now? If they use longer term bonds, they will face potential losses as those tend to be volatile relative to interest rate changes. If they use higher-yielding corporate bonds, they face default risk. There's something critical that's not being explained here which is important, and I wouldn't want to put my money in something like that without understanding it thoroughly.

speedplane 8y ago
> Can anyone explain to me how they are able to offer 3% when 1 year treasury notes are less than 3% right now? Easy. They're making a calculated decision to lose money on the interest rate, in order to build a relationship and make money on other services.
dragonwriter 8y ago
> Can anyone explain to me how they are able to offer 3% when 1 year treasury notes are less than 3% right now? It's a deal to get more trading accounts opened, both directly (people coming to RH for these accounts, which are not separate from trading accounts) and indirectly (e.g., it's a waitlisted feature that you move up in the waitlist by referring people to RH.) They don't need to make money on the savings feature considered in isolation.