5 ms·
What is the mechanism by which this fee will be passed to you?
by velcrovan 3y ago
What is the mechanism by which this fee will be passed to you?
- paulddraper 3y agoHis/her bank will charge higher fees or offer lower interest.
- dragontamer 3y agoSo move your money into a money market fund or other, lower-fee and/or higher-interest place to park cash.
- latchkey 3y agoAlready done. 4.9% is lovely right now. https://www.cit.com/cit-bank/bank/cds/no-penalty-cd https://www.cit.com/cit-bank/bank/cds/no-penalty-cd
- ghaff 3y agoThere's this somewhat odd bifurcation right now between: - Basically zero interest rate accounts which are presumably counting on a combination of small accounts and lazy money not bothering to chase market-level interest rates and - Banks/brokerages actively chasing people willing to park a lot of money in cash at current low-risk interest rates 4-5% may not beat inflation but it looks pretty good in a very uncertain economic environment.
- dragontamer 3y agoCPI's latest number is 4.9% YoY and 0.4% MoM. So the VMFXX's 5.01% rate is beating the latest estimates on inflation.
- ghaff 3y agoIn any case, you're at least very close to treading water. (And what your personal inflation rate is will vary.) Which looks pretty good compared to a lot of riskier investments right now.
- latchkey 3y agoDeFi enables far higher rates, but much risker.
- ghaff 3y agoLots of things offer the promise of higher rates but are much riskier.
- deleted 3y ago[deleted]
- bagacrap 3y agoI mean a MMF is not really an investment. It's a place to park your cash when you don't want to invest. Obviously other investments are riskier in the short term, but there's less risk long term in that you aren't guaranteed to lose purchasing power as you are with a MMF.
- ghaff 3y agoDepending on circumstances, it would seem like "I want maintain my pile of cash at roughly its current purchasing power value" is as valid as "I want to bet on making it bigger--based on long-term trends for certain investment classes" (or some combination thereof) as investment strategies.
- bagacrap 3y agoExcept an MMF is literally not an investment. It's a form of savings. There's nothing invalid about saving. However whether you want to invest or save has very little to do with "circumstances" and everything to do with personal inclinations and needs.
- dragontamer 3y agoPretty good, though locking it up in a CD could be a good or bad thing given the circumstances. I'm talking: https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx https://investor.vanguard.com/investment-products/mutual-fun... Which is 60%+ Fed Repos and the rest is US Treasuries of ~14 days of maturity or so on the average.
- anonymousiam 3y agoExpect those Treasuries to crash within a month if the US defaults on debt.
- xnx 3y agoI thought risky investments paid out higher interest.
- latchkey 3y agoTook me a few times reading this before I "got it". Excellent hilarious comment!
- latchkey 3y agoI've been paying attention over the last few years. These sorts of headline news things about ceilings have historically ended up magically being resolved before shit hits the fan. It sounds awful in the news and they make a big deal about it, but I think it is more for politics than it is an actual problem. I'd be super surprised that they don't work something out.
- latchkey 3y ago"No Penalty CD". It is a 7 day lock up. I've already 'upgraded' it from 4.85... which was a simple process of opening a new account and transferring it from the old account (all online on their website). Funny enough, this bank is linked from the Ally website as their 'competitor' rates... https://www.ally.com/bank/no-penalty-cd/ https://www.ally.com/bank/no-penalty-cd/
- plorkyeran 3y agoI've never paid a fee to a bank in my life and until the last few months interest rates on savings accounts were a rounding error.