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Bank accounts are only FDIC insured (or equivalent) up to some limit. If you have hundreds of millions and would otherwise stuff that in a bank account buying b
by dawhizkid 7y ago
Bank accounts are only FDIC insured (or equivalent) up to some limit. If you have hundreds of millions and would otherwise stuff that in a bank account buying bonds are a safe alternative
to get around that limit.
- why_only_15 7y agoThat doesn't really make sense, because if you have hundreds of millions of dollars you can just hold the money yourself.
- Dylan16807 7y agoVaults cost money. Insurance costs money. And it's still not quite as safe. The ability to hold the money yourself acts as a soft cap on how negative rates can be, but that cap is not at 0%.
- deleted 7y ago[deleted]
- BurningFrog 7y agoOK, but is that really who is buying all these bonds?
- dawhizkid 7y agoYes, institutional money is driving push into bonds, not retail investors/individuals.
- BurningFrog 7y agoThanks. That clarifies this for me!