3 ms·

Which is the behaviour the negative interest rate policy is intended to encourage. I’ve never quite understood -- can’t the bank do that for you? If the obst

Which is the behaviour the negative interest rate policy is intended to encourage. I’ve never quite understood -- can’t the bank do that for you? If the obstacle is that savings accounts are expected to have a guaranteed rate with zero risk, the banks ought to provide very easy access to investment accounts, with the ability to move money around frictionlessly. Is there just no demand for that kind of service, or regulatory problems, or something of that kind? Edit to add: I always felt that offset mortgages (https://en.wikipedia.org/wiki/Flexible_mortgage#Offset_mortgages https://en.wikipedia.org/wiki/Flexible_mortgage#Offset_mortg...) were a nice solution to this problem; it gives you a place to stash your savings and get a reasonable rate of return (basically matching your mortgage rate) while still being accessible if needed. But they seem to have gone out of fashion again, at least in the UK. Anyone know if there was some problem or disadvantage (either to consumers or to the banks)?

blitzar 5y ago
> I’ve never quite understood -- can’t the bank do that for you? You want them to tell you you have a fixed, gauranteed rate of return and use it to buy some apple stock or some bitcoin with it? The answer is they can do it for you, they do, do it for you, but you have to sign up for the gambling account not the instant access cash savings account.
- iainmerrick 5y ago
  Well... yes, sort of! Or at least, it’d be great if the bank let you choose how much money to put in a safe account with low but guaranteed interest, and how much in an investment account with higher but risky interest; and make it really easy to move money back and forth. I don’t know of any bank that offers anything like that. I guess there ought to be some safeguards, e.g. at least XX% of your money in a safe place. But there’s a point at which safeguards become friction that just stop you investing at all. For example, in the UK you have ISA accounts, which should work like that, but the restrictions are so annoying (yearly cap on deposits) and the benefits so weak (tax exempt, but on a pitiful interest rate so it makes no difference for most people) that they’re not very useful. Unless I’m missing something.
  - blitzar 5y ago
    Natwest.com ... Products: Bank Accounts, Mortgages, Savings, Investments, Loans ... Your investment options are limited to actual investments basically, so essensially shares. Term deposits dont seem to be a big thing in the UK for whatever reason, and we dont have the US tax breaks to buy municipal bonds etc. ISA's are great, you can go buy some apple stock or some FTSE funds or depending on the provider one of 1000's of funds with it. 'Cash ISAs' while rare are still around are no better or worse than a savings account (IMO).
    - iainmerrick 5y ago
      Yes, I was thinking of cash ISAs, which do seem a bit pointless. This is a good nudge for me to look around for better/easier options to store petty cash in, so I’m going to do that. Thanks!

blitzar 5y ago

> I’ve never quite understood -- can’t the bank do that for you? You want them to tell you you have a fixed, gauranteed rate of return and use it to buy some apple stock or some bitcoin with it? The answer is they can do it for you, they do, do it for you, but you have to sign up for the gambling account not the instant access cash savings account.

iainmerrick 5y ago
Well... yes, sort of! Or at least, it’d be great if the bank let you choose how much money to put in a safe account with low but guaranteed interest, and how much in an investment account with higher but risky interest; and make it really easy to move money back and forth. I don’t know of any bank that offers anything like that. I guess there ought to be some safeguards, e.g. at least XX% of your money in a safe place. But there’s a point at which safeguards become friction that just stop you investing at all. For example, in the UK you have ISA accounts, which should work like that, but the restrictions are so annoying (yearly cap on deposits) and the benefits so weak (tax exempt, but on a pitiful interest rate so it makes no difference for most people) that they’re not very useful. Unless I’m missing something.
- blitzar 5y ago
  Natwest.com ... Products: Bank Accounts, Mortgages, Savings, Investments, Loans ... Your investment options are limited to actual investments basically, so essensially shares. Term deposits dont seem to be a big thing in the UK for whatever reason, and we dont have the US tax breaks to buy municipal bonds etc. ISA's are great, you can go buy some apple stock or some FTSE funds or depending on the provider one of 1000's of funds with it. 'Cash ISAs' while rare are still around are no better or worse than a savings account (IMO).
  - iainmerrick 5y ago
    Yes, I was thinking of cash ISAs, which do seem a bit pointless. This is a good nudge for me to look around for better/easier options to store petty cash in, so I’m going to do that. Thanks!