Banks are slow to increase rates on savings accounts, but quick to reduce them

Re:Banks are slow to increase rates on savings accounts, but... by formercoder on Saturday July 25, 2020 @08:11AM (#23948594)

Online only banks offer great rates on savings accounts. The Fed has an influence but these rates are market driven. If you want high rates, look for them and put your money there. Many financial products are only available to the wealthy but in this case anyone can do this.

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Re:Banks are slow to increase rates on savings accounts, but... by garmaine on Saturday July 25, 2020 @08:19AM (#23948643)

Savings account rates are terrible compared with alternative investments though, even cash-storage investments.

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Re:Banks are slow to increase rates on savings accounts, but... by formercoder on Saturday July 25, 2020 @09:08AM (#23948903)

I’m not aware of anything with that risk / liquidity profile which pays better? In fact theoretically there shouldn’t be anything.

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Re:Banks are slow to increase rates on savings accounts, but... by throwaheyy on Saturday July 25, 2020 @07:33PM (#23953201)

- High yield savings accounts

- CDs

- Money market accounts

All pay much higher than a typical megabank savings account and are equally as safe.

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Re:Banks are slow to increase rates on savings accounts, but... by formercoder on Saturday July 25, 2020 @08:18PM (#23953393)

Sorry i meant better than high yield savings.

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Re:Banks are slow to increase rates on savings accounts, but... by throwaheyy on Saturday July 25, 2020 @08:31PM (#23953454)

Bond ETFs are right now around 2% yield with slightly higher risk than a savings account

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Re:Banks are slow to increase rates on savings accounts, but... by NovemberWhiskey on Saturday July 25, 2020 @09:53AM (#23949179)

Well, that sort of depends on how you value FDIC insurance.

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Re:Banks are slow to increase rates on savings accounts, but... by formercoder on Saturday July 25, 2020 @01:41PM (#23951003)

Not any higher than SIPC

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Re:Banks are slow to increase rates on savings accounts, but... by zdkl on Saturday July 25, 2020 @08:31AM (#23948705)

Could you give some examples, adjusting for risk?

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Re:Banks are slow to increase rates on savings accounts, but... by Aunche on Saturday July 25, 2020 @10:12AM (#23949309)

No penalty CDs are strictly better than savings accounts. I was able to lock my emergency savings into a 1.6% CD the day the Fed announced rates cuts.

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Re:Banks are slow to increase rates on savings accounts, but... by formercoder on Saturday July 25, 2020 @06:12PM (#23952805)

Why are they strictly better? You remove interest rate risk at the expense of yield. They currently pay less than high interest savings.

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Re:Banks are slow to increase rates on savings accounts, but... by Aunche on Saturday July 25, 2020 @08:44PM (#23953515)

Whenever I looked at them last year, they were always slightly higher yield than the online savings accounts. Perhaps it was just a promotional rate.

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Re:Banks are slow to increase rates on savings accounts, but... by mfer on Saturday July 25, 2020 @08:18AM (#23948640)

Online only banks have fewer expenses (no branches or staff in them). This appears to translate into higher rates which is a selling point for them.

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Re:Banks are slow to increase rates on savings accounts, but... by smoe on Saturday July 25, 2020 @08:41AM (#23948759)

I think traditional banks, which apparently used to have much better rates even with all the expenses, have found that people are perfectly willing to give them their money practically for free. The newer online competeritors need something to draw in costumers.

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