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Thread: interest rates on basic savings accounts are now above the target run-rate of inflation

  1. #1

    Default interest rates on basic savings accounts are now above the target run-rate of inflation

    Quote Originally Posted by golditiki2 View Post
    Everything is expressed in units of value ( fiat nowadays ) and if you want to hold a purchasing value of your excess fiat, nobody ( well some do ) should keep it in fiat which depreciates. That's why most people buy someting which in their opinion will not depreciate. be it gold, silver, real estate, stocks or bottle capsules.

    With my example i just tried to say that gold has done its job, it has in 18 years gone from 1 to 3.4 value units which IMO is not bad.

    You cannot deny that stocks, bonds and estate are also risky, at some moment they are top and then miserable investments. i can give you examples of top stocks which crashed. Like there was a gold euphoria, there have also been stock- euphoriae and it is too easy to brag when something is on its zenith and say, Heheh you see I know. The only moment one can call himself to have been lucid is when he got out in time before a crash.

    Situations change over time, but essentially they always come back to the basic truths of Life and Nature. Gold is the tarmac, the place from which all planes start and on which they all land.

    Golditiki2+++



    Golditiki2+++
    It is increasingly a lesser point these days as interest rates on basic savings accounts are now above the target run-rate of inflation. Doing nothing but putting your paper money in a pure vanilla savings account will cover inflation. 3 month LIBOR is pushing 2.6% these days.
    Last edited by Ryanferr; 11-06-2018 at 08:01 AM.
    The answers are in the data

  2. #2
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    Default

    Quote Originally Posted by Ryanferr View Post
    It is increasingly a lesser point these days as interest rates on basic savings accounts are now above the target run-rate of inflation. Doing nothing but putting your paper money in a pure vanilla savings account will cover inflation. 3 month LIBOR is pushing 2.6% these days.
    Well, maybe in the USA but not in the EU!
    I get 0.1% on my savings account in the Netherlands, 20 yr mortgage rate is 2.9% now.
    A decade ago I got 3% on my savings account and the 20 yr mortgage rate was 5.5% or so.....My house has gone up 8% in "value" in that past period to now.

    Something does not add up!
    As long as saving COSTS "money" in the EU things are not going well at all in my eyes.

  3. #3

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    Quote Originally Posted by DutchSilver View Post
    Well, maybe in the USA but not in the EU!
    I get 0.1% on my savings account in the Netherlands, 20 yr mortgage rate is 2.9% now.
    A decade ago I got 3% on my savings account and the 20 yr mortgage rate was 5.5% or so.....My house has gone up 8% in "value" in that past period to now.

    Something does not add up!
    As long as saving COSTS "money" in the EU things are not going well at all in my eyes.
    Ah, fair enough -- it is certainly true I am less familiar with interest rates in Europe as an American. Thanks for sharing your info, very helpful. Here I am getting 2.05% on my savings account and that's not even the highest offered among what I consider to be "legit" / major banks in the US.
    The answers are in the data

  4. #4

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    Quote Originally Posted by Ryanferr View Post
    It is increasingly a lesser point these days as interest rates on basic savings accounts are now above the target run-rate of inflation. Doing nothing but putting your paper money in a pure vanilla savings account will cover inflation. 3 month LIBOR is pushing 2.6% these days.
    I just check my main banks savings account interest rate (Wells Fargo) and it is at .01%. A 3 month "LIBOR" is not where most people hold their short term fiat digits needed for life expenses. Rather, most are getting well under 1% interest rates. The problem with "data", is that you can so easily cherry pick to push your agenda, or simply give outright false "data". It is not if financial institutions are GOD, and the data they present is unvarnished truth. The official inflation rate also has a political agenda, and how it is calculated has changed over the years.

    Further, the "fundamentals" (as you state on another post) in PM's are hardly just in their short term fiat price. Anyone who thinks it is, gets it wrong, as they simply don't know the vary basic reasons many people choose to hold PM's in physical form. In short, all the data in the world is no substitute for ignorance & bigotry.

    We've gone in circles over this for a long time. I'm sure you will repeat the same thing. And that is all fine and well - -my agenda here is to point out your agenda, which is in support of the financial system, and to minimize the value people place in PM's as money. Guess it's all about where you have placed your stake, let's not pretend we really care about so many people -- as the soft handed currency masters have convinced so many of.
    Last edited by motocat; 11-06-2018 at 12:53 PM.
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  5. #5

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    Quote Originally Posted by motocat View Post
    I just check my main banks savings account interest rate and it is at .01%. A 3 month "LIBOR" is not where most people hold their short term fiat digits needed for life expenses. Rather, most are getting well under 1% interest rates. The problem with "data", is that you can so easily cherry pick to push your agenda, or simply give outright false "data". It is not if financial institutions are GOD, and the data they present is unvarnished truth. The official inflation rate also has a political agenda, and how it is calculated has changed over the years.

    Further, the "fundamentals" (as you state on another post) in PM's are hardly just in their short term fiat price. Anyone who thinks it is, gets it wrong, as they simply don't know the vary basic reasons people choose to hold PM's in physical form. In short, all the data in the world is no substitute for ignorance.

    We've gone in circles over this for a long time. I'm sure you will repeat the same thing. And that is all fine and well - -my agenda here is to point out your agenda, which is in support of the financial system, and to minimize the value people place in PM's as money. Guess it's all about where you have placed your stake, let's not pretend we really care about so many people -- as the soft handed currency masters have convinced so many of.
    That's a lot of hand waiving to arrive at the conclusion you should find a new bank. Plenty of banks offer high yield savings accounts with no fees and minimums and there are multiple free comparison tools available online that can direct you to these better products. All it takes is a simple google search. The fact you have elected to not move your money in pursuit of these higher yields is a personal decision / problem, not a reality handcuffing people. The key take away is interest rates are up however you measure them: fed funds rates, floating rate benchmark such as LIBOR that impact a multitude of other products (corporate borrowing rates, credit cards, mortgages, etc), savings account rates, CD rates, mortgage rates, the 10 yr treasury, etc. If you're still getting 0.01% that is a poor reflection of your grasp on where the market is right now and strictly a voluntary decision. I would suggest moving your money to a better bank, but it's possible you have a reason for wanting to stick with a particular financial institution that offers below market rates (maybe they are good at other stuff that you value more than the deposit rate).

    That's what's fun about data. It helps you make better decisions. Ignorance isn't an excuse. Marcus, Ally, Discover, AMEX, Citizens Bank, Barclays, HSBC, CIT, Capital One, and Synchrony all offer floating rate savings products that range from 1.85%-2.25% right now. The Vanguard MM fund offers ~2.2%. The 10yr treasury is yielding 3.2%. Lots of options that may be worth exploring on your end.
    Last edited by Ryanferr; 11-06-2018 at 01:04 PM.
    The answers are in the data

  6. #6

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    Quote Originally Posted by Ryanferr View Post
    That's a lot of hand waiving to arrive at the conclusion you should find a new bank. Plenty of banks offer high yield savings accounts with no fees and minimums and there are multiple free comparison tools available online that can direct you to these better products. All it takes is a simple google search. The fact you have elected to not move your money in pursuit of these higher yields is a personal decision / problem, not a reality handcuffing people. The key take away is interest rates are up however you measure them: fed funds rates, floating rate bench markets such as LIBOR, savings account rates, CD rates, mortgage rates, the 10 yr treasury, etc. If you're still getting 0.01% that is a poor reflection of your grasp on where the market is right now and strictly a voluntary decision. I would suggest moving your money to a better bank, but it's possible you have a reason for wanting to stick with a particular financial institution that offers below market rates (maybe they are good at other stuff that you value more than the deposit rate).

    That's what's fun about data. It helps you make better decisions. Ignorance isn't an excuse. Marcus, Ally, Discover, AMEX, Citizens Bank, Barclays, HSBC, CIT, Capital One, and Synchrony all offer floating rate savings products that range from 1.85%-2.25% right now. The Vanguard MM fund offers ~2.2%. The 10yr treasury is yielding 3.2%. Lots of options that may be worth exploring on your end.
    I use a friend as a "bank" and get 20%+ interest rates, and can call and get the cash I've loaned within a couple days. That beats anything I can find from your own big banker "friends". And yes, I know the risk to be low, and also know that his investments help the community. Still, I need a brick & motor institution nearby, as I often need to make daily cash withdrawals, and my time is to valuable to travel far for such little things. Also, believe it or not, most people are simple, and also prefer to use banks in their neighborhood for various reasons -- and as their savings amounts can vary drastically pay check to pay check -- can't just stick in some 2 year CD. You look around, at all the major bank savings rates -- and you will see ".01%" as common*. That's what many people know and see. You are disconnected from the common worker if you do not know this. They are not all digitized financial geeks who have time to spend googling for sometimes obscure (& perhaps risky) banks offering special rates. I just checked my Vanguard settlement fund rate (VMFXX) -- and YTD it is 1.41%, that's great (compared to near zero of recent past or 0.34% over ten years) but still nowhere near keeping up with the inflation I see. The fact that you see your little interest rate as good enough, tells me you have more faith in these large and faceless institutions to take care of you, rather then knowing and trusting people in small business who can offer you far better. This should come as no surprise, given your tone and agenda here.

    Also note -- I watch and trade bond funds closely. The valuations of such funds have taken such massive hits recently, that the increased interest rates have fallen far behind in making up for such losses. That's why you see a loss in all of Vanguard bond funds year to date (for example, BND is -2.67% YTD, while EDV is at -13.7%!) Yes, that's a negative folks -- not a ~. So what do you recommend -- selling stocks to buy bond funds now? Or I know what you would really like -- us stackers to turn them in for digits -- in that, your missionary work for that magical digital god will have one more convert! Do you get an award for that - maybe a PM virgin bride who cares not for even gold rings (maybe just an app to watch your digit growth)? Anyway -- this is fun, no hard feelings, wouldn't want your parole to be so short -OK, we can still be friends?

    *Chase is at .01%, Bank of America .02%,
    Last edited by motocat; 11-06-2018 at 01:36 PM.
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  7. #7

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    Quote Originally Posted by motocat View Post
    I use a friend as a "bank" and get 20%+ interest rates, and can call and get the cash I've loaned within a couple days. That beats anything I can find from your sources. And yes, I know the risk to be low, and also know that his investments help the community. Still, I need a brick & motor institution nearby, as I often need to make daily cash withdrawals, and my time is to valuable to travel far for such little things. Also, believe it or not, most people are simple, and also prefer to use banks in their neighborhood for various reasons -- and as their savings amounts can vary drastically pay check to pay check -- can't just stick in some 2 year CD. You look around, at all the major bank savings rates -- and you will see ".01%" as common*. That's what many people know and see. You are disconnected from the common worker if you do not know this. They are not all digitized financial geeks who have time to spend googling for sometimes obscure (& perhaps risky) banks offering special rates. I just checked my Vanguard settlement fund rate (VMFXX) -- and YTD it is 1.41%, that's great (compared to near zero of recent past) but still nowhere near keeping up with the inflation I see. The fact that you see your little interest rate as good enough, tells me you have more faith in these large and faceless institutions to take care of you, rather then knowing and trusting people in small business who can offer you far better. This should come as no surprise, given your tone and agenda here.

    Also note -- I watch and trade bond funds closely. The valuations of such funds have taken such massive hits recently, that the increased interest rates have fallen far behind in making up for such losses. That's why you see a loss in all of Vanguard bond funds year to date (for example, BND is -2.67% YTD, while EDV is at -13.7%!) Yes, that's a negative folks -- not a ~. So what do you recommend -- selling stocks to buy bond funds now? Or I know what you would really like -- us stackers to turn them in for digits -- in that, your missionary work for that magical digital god will have one more convert! Do you get an award for that - maybe a PM virgin bride who cares not for even gold rings? Anyway -- this is fun, no hard feelings, wouldn't want your parole to be so short -OK, we can still be friends?

    *Chase is at .01%, Bank of America .02%,
    The point was simply it's incredibly easy to get a return that exceeds the target rate of inflation. How you chose to do it is up to you. If people want to continue using a local bank that offers below market rates, that's fine, I specifically said above that people may chose to stick with a bank paying below market rates for other reasons, but again -- that's a personal choice, not a handcuff.

    All of those banks offer rates around 2% without using a CD, so that isn't relevant. Time spent googling takes a second. Literally just type "high yield savings account" into google. Don't assume everyone is as disinterested in the matter as you. You found the time to find BoA's and Chase's rates, so it obviously can't be that cumbersome.

    I am not making any recommendations on whether one should buy bonds or stocks or do anything in particular, simply pointing out that avoiding inflation is far easier now that rates are higher. As rates continue to get hiked further, floating rates on deposits will go higher yet.

    We will always be friends, Moto.
    Last edited by Ryanferr; 11-06-2018 at 02:44 PM.
    The answers are in the data

  8. #8

    Default

    Quote Originally Posted by golditiki2 View Post
    Everything is expressed in units of value ( fiat nowadays ) and if you want to hold a purchasing value of your excess fiat, nobody ( well some do ) should keep it in fiat which depreciates. That's why most people buy someting which in their opinion will not depreciate. be it gold, silver, real estate, stocks or bottle capsules.

    With my example i just tried to say that gold has done its job, it has in 18 years gone from 1 to 3.4 value units which IMO is not bad.

    You cannot deny that stocks, bonds and estate are also risky, at some moment they are top and then miserable investments. i can give you examples of top stocks which crashed. Like there was a gold euphoria, there have also been stock- euphoriae and it is too easy to brag when something is on its zenith and say, Heheh you see I know. The only moment one can call himself to have been lucid is when he got out in time before a crash.



    Golditiki2+++
    Certainly I agree with all of that and I for sure would never be one to present any investment as one without risk. Surely stocks and real estate have risk, same as metals, in which I have enjoyed the ups and dealt with the downs in all. My only problem was with the way FIAT was represented in which it is being used as an example of it being such a poor investment in its own right. Fiat is really only a process in which making transactions is easy and convenient. It is really nothing more.
    Last edited by SilverStocker; 11-06-2018 at 01:59 PM.

  9. #9

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    Quote Originally Posted by Ryanferr View Post
    The point was simply it's incredibly easy to get a return that exceeds the target rate of inflation. How you chose to do it is up to you. If people want to continue using a local bank that offers below market rates, that's fine, I specifically said above that people may chose to stick with a bank paying below market rates for other reasons, but again -- that's a personal choice, not a handcuff.

    All of those banks offer rates around 2% without using a CD, so that isn't relevant. Time spent googling takes a second. Literally just type "high yield savings account" into google. Don't assume everyone is as disinterested in the matter as you. You found the time to find BoA's and Chase's rates, so it obviously can't be that cumbersome.

    I am not making any recommendations on whether one should buy bonds or stocks or do anything in particular, simply pointing out that avoiding inflation is far easier now that rates are higher. As rates continue to get hiked further, floating rates on deposits will go higher yet.

    We will always be friends, Moto.
    You seem to be quite capable in using google. Why not check out how working class people have actually fared with their accessible savings keeping up with inflation over the last 10, 5, 3, or even 1 year? Or do you prefer cherry picking from short moments in time and theoretical populations with your same digital awareness vs what the actual cold hard "data" tells us about the population and rates over time? Also -- even those 2% rates you can now get, do not keep up with the inflation most people see in their real lives (at least not here in CA -- don't know what's going down in what maybe your underemployed and under financed location).

    Given I have your attention -you can actually help me with a service. Let me know if and how you can deposit or retrieve cash (as in paper - not that B.S. liquid terminology industry insiders have been using) into or out of these 2%+ savings accounts (and do any allow check-writing?). Also here is an idea maybe you can "take to the bank" one day: offer a service to arrive at peoples homes to accept and or deliver cash and checks into these higher rate accounts -- you can even make it into an app, just like the many food delivery services. I myself would use such a service (and know others who also would) -- for now, if you can just point out how I can work this out now -- I will follow through and send you some silver dollars if you can help out. This is real.
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  10. #10

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    Quote Originally Posted by motocat View Post
    You seem to be quite capable in using google. Why not check out how working class people have actually fared with their accessible savings keeping up with inflation over the last 10, 5, 3, or even 1 year?
    My post was clearly in regard to the situation right now and made no attempt to argue the efficacy of a high yield savings account over any prior time duration. Given where rates are today and where rates are projected to be heading, getting at least a 2% or above return is easily done. It's very simple and no one is cherry picking data. You are rambling again. Bring it back in.
    Last edited by Ryanferr; 11-06-2018 at 04:53 PM.
    The answers are in the data

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