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(Axios)   While banks are charging record high fees, they are also paying record low interest rates, averaging just 0.04%. To put that in perspective, if you invested $100 at that rate, in 20 years through the miracle of compound interest it'd be worth $100.84   (axios.com) divider line
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372 clicks; posted to Business » on 26 Oct 2020 at 5:50 PM (5 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2020-10-26 1:45:00 PM  
I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.

It's like suddenly finding out that all your neighbors have rotary phones. You're not quite sure where to start asking questions...
 
2020-10-26 1:53:39 PM  

NikolaiFarkoff: I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.

It's like suddenly finding out that all your neighbors have rotary phones. You're not quite sure where to start asking questions...


Bu... why?  Like, if you already have a checking/savings account at a major bank and have all of your bill pay and direct deposit all tied to it what is out there that would make you through the hassle of changing?  An extra 0.2% on your $5K saving account?
 
2020-10-26 2:03:15 PM  
You'd earn $6,000,000 per YEAR if you just put $15,000,000,000 in your local savings account and leave it there.

Stupid libs.
 
2020-10-26 2:03:39 PM  
Meanwhile your credit card interest rate is somewhere north of 11%
 
2020-10-26 2:11:24 PM  

OptionC: Bu... why?  Like, if you already have a checking/savings account at a major bank and have all of your bill pay and direct deposit all tied to it what is out there that would make you through the hassle of changing?  An extra 0.2% on your $5K saving account?


When I first made the switch to online banks, the difference was 0.50% vs 4.5% on savings, so the motivations was a lot greater. Today the gap is more like 0.1% to 0.75%. A similar multiple, but less motivation.

But more than that, my experience is that online banks are far easier to use and more responsive than legacy banks. And FAR less fees. Discover Bank literally just eliminated ALL fees, so even if you overdraw your checking, you get a friendly text message and a decent grace period to fix it.

I do have a token amount in a large bank just for emergency cash, but for most cash needs I can either write myself a check or visit Walmart, Dollar General, and a few others, use Discover Card, and get cash back with no fee or interest. But that's rare, I only carry cash for occasional tips or kids' allowance.
 
2020-10-26 2:17:48 PM  

Rev.K: Meanwhile your credit card interest rate is somewhere north of 11%


Credit card interest rates aren't high because of the cost of funds, they're high because it is completely unsecured consumer debt.  Cost of funds is (almost) completely irrelevant.
 
2020-10-26 2:50:03 PM  
My bank paid me two cents last month in interest.  Don't hate me for being rich.
 
2020-10-26 3:09:08 PM  

OptionC: NikolaiFarkoff: I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.

It's like suddenly finding out that all your neighbors have rotary phones. You're not quite sure where to start asking questions...

Bu... why?  Like, if you already have a checking/savings account at a major bank and have all of your bill pay and direct deposit all tied to it what is out there that would make you through the hassle of changing?  An extra 0.2% on your $5K saving account?


For me, it was because B of A was a parasitic POS. I moved to a credit union and never looked back.

Of course, this was in my early 20s, I had no loans or direct deposit (cash checks) so it was pretty easy.
 
2020-10-26 3:22:46 PM  
Wow, that takes me back... reminds me of when I had a Bank of America savings account.

I've currently got some of my retirement savings out of the market, parked in a money market fund. The present  pathetic rate of return on that one makes the old BofA account look like a goldmine.
 
2020-10-26 4:28:20 PM  
Who cares about banks in this day and age?
Fark user imageView Full Size
 
2020-10-26 5:31:34 PM  

NikolaiFarkoff: OptionC: Bu... why?  Like, if you already have a checking/savings account at a major bank and have all of your bill pay and direct deposit all tied to it what is out there that would make you through the hassle of changing?  An extra 0.2% on your $5K saving account?

When I first made the switch to online banks, the difference was 0.50% vs 4.5% on savings, so the motivations was a lot greater. Today the gap is more like 0.1% to 0.75%. A similar multiple, but less motivation.

But more than that, my experience is that online banks are far easier to use and more responsive than legacy banks. And FAR less fees. Discover Bank literally just eliminated ALL fees, so even if you overdraw your checking, you get a friendly text message and a decent grace period to fix it.

I do have a token amount in a large bank just for emergency cash, but for most cash needs I can either write myself a check or visit Walmart, Dollar General, and a few others, use Discover Card, and get cash back with no fee or interest. But that's rare, I only carry cash for occasional tips or kids' allowance.


I guess I get it if you're prone to overdrafting or otherwise subject to fees.  I guess when I was young and poor something like Chime or Discover Bank would have made sense but being middle aged and well-off I'm not really sure that it would give me anything different than Chase does.
 
2020-10-26 5:35:52 PM  
I have banking, insurance, online investments and mortgage with one major bank. I don't pay any fees as part of a complicated bonus system between all of the parts.
 
2020-10-26 6:03:46 PM  

Tr0mBoNe: I have banking, insurance, online investments and mortgage with one major bank. I don't pay any fees as part of a complicated bonus system between all of the parts.


When I was a kid, you got 5% on savings.
And chexks were free, no minimum balance, when I was in college.
Also: didn't have a credit card.

This is progress?
For the banks, maybe.
 
2020-10-26 6:09:16 PM  

Truck Fump: Tr0mBoNe: I have banking, insurance, online investments and mortgage with one major bank. I don't pay any fees as part of a complicated bonus system between all of the parts.

When I was a kid, you got 5% on savings.
And chexks were free, no minimum balance, when I was in college.
Also: didn't have a credit card.

This is progress?
For the banks, maybe.


When you were a kid, inflation was also probably 5% (or higher).  The disinflation of the last 20 years has been remarkably persistent and generally a good thing.  It makes savings accounts rather useless, though.

You got free checks and no minimum balance on a checking account *because* you were in college (I'm assuming this was the 90s, like myself).  Banks were doing a lot of skeevy shiat to try to bring in college students at that time because they overdraft a lot and are an easy sell for credit cards.
 
2020-10-26 6:21:26 PM  

Rev.K: Meanwhile your credit card interest rate is somewhere north of 11%


I have never paid any interest on my credit cards. Pay your farking balance!
 
2020-10-26 6:23:30 PM  

Truck Fump: When I was a kid, you got 5% on savings.
And chexks were free, no minimum balance, when I was in college.
Also: didn't have a credit card.


Aren't those just student accounts?  The key is to never close it.
 
2020-10-26 6:24:00 PM  

chitownmike: Rev.K: Meanwhile your credit card interest rate is somewhere north of 11%

I have never paid any interest on my credit cards. Pay your farking balance!


Or milk your 0% intro rate.
 
2020-10-26 6:41:47 PM  

Tr0mBoNe: I have banking, insurance, online investments and mortgage with one major bank. I don't pay any fees as part of a complicated bonus system between all of the parts.


LIES! PURE LIES!


What bank waives fees?

NONE! NONE BANKS!
 
2020-10-26 6:45:43 PM  

NikolaiFarkoff: It's like suddenly finding out that all your neighbors have rotary phones.


NikolaiFarkoff: but for most cash needs I can either write myself a check


um.
 
2020-10-26 6:46:55 PM  

Truck Fump: Tr0mBoNe: I have banking, insurance, online investments and mortgage with one major bank. I don't pay any fees as part of a complicated bonus system between all of the parts.

When I was a kid, you got 5% on savings.
And chexks were free, no minimum balance, when I was in college.
Also: didn't have a credit card.

This is progress?
For the banks, maybe.


Yeah, so did I. Problem is that your parents and mine were paying >10% on mortgage and auto loans.

Now, I haven't paid a bank fee on my checking in years, and I don't write enough checks to be bothered by the expense of buying them.
 
2020-10-26 6:51:32 PM  

NikolaiFarkoff: I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.

It's like suddenly finding out that all your neighbors have rotary phones. You're not quite sure where to start asking questions...


I get money back on my mortgage due to my direct deposited paychecks. I get six months forgiveness if I get furloughed or fired. I get a lower interest rate on my mortgage than I would with the other lenders I looked at, before the aforementioned cash back.

And when something goes wrong, I have a building to walk into. I have not had fun resolving issues with errors by online payment stuff like paypal. I wouldn't trust someone with my money without a brick and mortar.

I'm sure credit unions are fine too. I suppose I could keep some money in a credit union and some in chase, but better yet I just shouldn't keep large sums in my checking or savings, eh?

Have a specific better choice? I noticed you didn't name anything. If your advice is merely "generic local credit union" or "study it out" then you have your answer to your question. People don't want to study it out.
 
2020-10-26 6:55:46 PM  

Truck Fump: Tr0mBoNe: I have banking, insurance, online investments and mortgage with one major bank. I don't pay any fees as part of a complicated bonus system between all of the parts.

When I was a kid, you got 5% on savings.
And chexks were free, no minimum balance, when I was in college.
Also: didn't have a credit card.

This is progress?
For the banks, maybe.


Interest rates changed.

Are you blaming big banks for interest rates going down?
 
2020-10-26 7:01:47 PM  

NikolaiFarkoff: I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.

It's like suddenly finding out that all your neighbors have rotary phones. You're not quite sure where to start asking questions...


So, some of it is indeed just habit and stickiness.  Think of all the people that bought shiatbox Chevrolets and Plymouths in the 80's and 90's because "they were a GM/Mopar family" and that's just what you did.  shiat, my folks are still with the same cell carrier and ISP they've had since the mid 90's - the former has been sold 3 times, and they're happy with whoever buys it (Sprint to 360 to Alltel to Verizon).  The latter, well, they're perhaps the ONLY people still using the same local ISP they started using in the mid 90's.

The other part: if you're in a middle class household, you probably don't have that much in actual savings accounts.  Have a bit in there for liquidity, but more is in IRAs, Money Markets, brokerage accounts, mutual funds, etc.  They aren't paying much if anything in fees, and the ones they do deal with (ATM fees from non-network ATMs) they just accept as the cost of doing business.  If they use the bank for a business as well, they're even more likely to keep it.
 
2020-10-26 7:03:10 PM  

NikolaiFarkoff: but for most cash needs I can either write myself a check


Cashing it where?  The payday loan places?  Just pure curiosity.

For basic cash needs, I have a Schwab checking account.  Reimbursed ATM fees everywhere.  I try not to abuse it much in the US, but I've used it to pull out ATM cash in eight different currencies, and that's been bloody spectacular.
 
2020-10-26 7:16:56 PM  
That's simple interest, subby.

Compounded monthly, it would probably be around $105.
 
2020-10-26 7:48:05 PM  
Fark user imageView Full Size
 
2020-10-26 7:49:42 PM  

Smackledorfer: NikolaiFarkoff: I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.

It's like suddenly finding out that all your neighbors have rotary phones. You're not quite sure where to start asking questions...

I get money back on my mortgage due to my direct deposited paychecks. I get six months forgiveness if I get furloughed or fired. I get a lower interest rate on my mortgage than I would with the other lenders I looked at, before the aforementioned cash back.

And when something goes wrong, I have a building to walk into. I have not had fun resolving issues with errors by online payment stuff like paypal. I wouldn't trust someone with my money without a brick and mortar.

I'm sure credit unions are fine too. I suppose I could keep some money in a credit union and some in chase, but better yet I just shouldn't keep large sums in my checking or savings, eh?

Have a specific better choice? I noticed you didn't name anything. If your advice is merely "generic local credit union" or "study it out" then you have your answer to your question. People don't want to study it out.


Your last line is all too true.

I use a CU for my car loan (2.75%). Their money market is at 0.6%, which matches other high yield savings accounts. I stopped keeping much money with a big bank. Just whatever I might need to withdraw for cash purchases.

Low-interest times like these are an opportunity to pay off debt and invest.
 
2020-10-26 7:53:14 PM  

Fonaibung: Smackledorfer: NikolaiFarkoff: I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.

It's like suddenly finding out that all your neighbors have rotary phones. You're not quite sure where to start asking questions...

I get money back on my mortgage due to my direct deposited paychecks. I get six months forgiveness if I get furloughed or fired. I get a lower interest rate on my mortgage than I would with the other lenders I looked at, before the aforementioned cash back.

And when something goes wrong, I have a building to walk into. I have not had fun resolving issues with errors by online payment stuff like paypal. I wouldn't trust someone with my money without a brick and mortar.

I'm sure credit unions are fine too. I suppose I could keep some money in a credit union and some in chase, but better yet I just shouldn't keep large sums in my checking or savings, eh?

Have a specific better choice? I noticed you didn't name anything. If your advice is merely "generic local credit union" or "study it out" then you have your answer to your question. People don't want to study it out.

Your last line is all too true.

I use a CU for my car loan (2.75%). Their money market is at 0.6%, which matches other high yield savings accounts. I stopped keeping much money with a big bank. Just whatever I might need to withdraw for cash purchases.

Low-interest times like these are an opportunity to pay off debt and invest.


Car loans do seem to be the big thing for credit unions.
 
2020-10-26 8:35:13 PM  

NikolaiFarkoff: OptionC: Bu... why?  Like, if you already have a checking/savings account at a major bank and have all of your bill pay and direct deposit all tied to it what is out there that would make you through the hassle of changing?  An extra 0.2% on your $5K saving account?

When I first made the switch to online banks, the difference was 0.50% vs 4.5% on savings, so the motivations was a lot greater. Today the gap is more like 0.1% to 0.75%. A similar multiple, but less motivation.

But more than that, my experience is that online banks are far easier to use and more responsive than legacy banks. And FAR less fees. Discover Bank literally just eliminated ALL fees, so even if you overdraw your checking, you get a friendly text message and a decent grace period to fix it.

I do have a token amount in a large bank just for emergency cash, but for most cash needs I can either write myself a check or visit Walmart, Dollar General, and a few others, use Discover Card, and get cash back with no fee or interest. But that's rare, I only carry cash for occasional tips or kids' allowance.


I was very tempted to switch to an online bank last year.  Current bank pays .03% interest (probably even less now with covid) and the online bank would've paid 1.5%.  But thanks to covid and racing to the bottom, interest rates even in online banks are paying almost nothing.  Just not worth it.

And now the stock market is tanking because republicans suck...

I almost need to throw my money in some foreign banks as a hedge if things get bad next month (either with covid or the election going insane)
 
2020-10-26 9:01:26 PM  

jake3988: NikolaiFarkoff: OptionC: Bu... why?  Like, if you already have a checking/savings account at a major bank and have all of your bill pay and direct deposit all tied to it what is out there that would make you through the hassle of changing?  An extra 0.2% on your $5K saving account?

When I first made the switch to online banks, the difference was 0.50% vs 4.5% on savings, so the motivations was a lot greater. Today the gap is more like 0.1% to 0.75%. A similar multiple, but less motivation.

But more than that, my experience is that online banks are far easier to use and more responsive than legacy banks. And FAR less fees. Discover Bank literally just eliminated ALL fees, so even if you overdraw your checking, you get a friendly text message and a decent grace period to fix it.

I do have a token amount in a large bank just for emergency cash, but for most cash needs I can either write myself a check or visit Walmart, Dollar General, and a few others, use Discover Card, and get cash back with no fee or interest. But that's rare, I only carry cash for occasional tips or kids' allowance.

I was very tempted to switch to an online bank last year.  Current bank pays .03% interest (probably even less now with covid) and the online bank would've paid 1.5%.  But thanks to covid and racing to the bottom, interest rates even in online banks are paying almost nothing.  Just not worth it.

And now the stock market is tanking because republicans suck...

I almost need to throw my money in some foreign banks as a hedge if things get bad next month (either with covid or the election going insane)


A lot of foreign banks will not open accounts for Americans.
 
2020-10-26 9:01:57 PM  

Ivo Shandor: Who cares about banks in this day and age?
[Fark user image image 468x263]


I have no idea why this meme enrages me so.
 
2020-10-26 9:05:26 PM  
But keep putting money in a savings account, right gramps?
 
2020-10-26 9:09:25 PM  
Banks haven't paid jack shiat in interest on traditional checking or savings in years. This is news?
 
2020-10-26 9:10:56 PM  
Individual depositors have to compete with the Fed when the banks look for money to loan

/well, to meet their fractional reserve requirements so they can loan

brrr.farmView Full Size
 
2020-10-26 9:13:24 PM  

hoodiowithtudio: Ivo Shandor: Who cares about banks in this day and age?
[Fark user image image 468x263]

I have no idea why this meme enrages me so.


Is this one any better?
cdn.mos.cms.futurecdn.netView Full Size
 
2020-10-26 9:21:47 PM  

TheSubjunctive: NikolaiFarkoff: but for most cash needs I can either write myself a check

Cashing it where?  The payday loan places?  Just pure curiosity.

For basic cash needs, I have a Schwab checking account.  Reimbursed ATM fees everywhere.  I try not to abuse it much in the US, but I've used it to pull out ATM cash in eight different currencies, and that's been bloody spectacular.


2nd the Schwab checking account. Their only fees are for bank checks and wire transfers.
 
2020-10-26 9:23:56 PM  
I "know this guy"  who left about 300 dollars  in a passbook in a Japanese bank for 15 years and did not touch it. When he finally closed the account, the bank had been merged twice. He got his money back,

and 40 cents interest.

Do people really do that? People do.

And I guess that means that if you want to know about low interest rates, you should look at Japan for the last 30 years.
 
2020-10-26 9:26:17 PM  

bfh0417: Banks haven't paid jack shiat in interest on traditional checking or savings in years. This is news?


No, but it should be. I had a bank entice me to move my money to them several years ago. They were offering 5% on all accounts. I was loving that return until they notified me a few months later that they could no longer offer that. It wasn't a  "teaser" rate, but I guess they can modify the terms whenever they want. I made the mistake of trusting a (former) friend who worked for that bank. He never mentioned anything other than, "5% on your money as long as you have more than $10k in the account". farker moved to a different bank shortly after that.
 
2020-10-26 9:27:20 PM  

hoodiowithtudio: Ivo Shandor: Who cares about banks in this day and age?
[Fark user image image 468x263]

I have no idea why this meme enrages me so.


The brrr one is worse.
 
2020-10-26 9:31:39 PM  

OptionC: Rev.K: Meanwhile your credit card interest rate is somewhere north of 11%

Credit card interest rates aren't high because of the cost of funds, they're high because it is of regulations and usury laws limiting the rate you can charge for completely unsecured consumer debt.  Cost of funds is (almost) completely irrelevant.


ACK-chaually, the cost of funds IS higher for risky borrowers, and it should be. And if a business' stated purpose is to finance high risk lenders, it will have a higher cost of funds. The only way around that is to lie about your risk or the risk of the borrower. And we know that never happens wink wink in the highly regulated and fully hedged American system that learned nothing from 2008.

Now if you are telling me that a 100 basis point increase in cost of funds will have nothing to do with a credit card company charging the maximum amount allowed under usury laws, then you are absolutely right.
 
2020-10-26 9:36:44 PM  
Dividend yielding high cash value whole life insurance.  You're welcome.
 
2020-10-26 9:42:48 PM  

Ivo Shandor: Who cares about banks in this day and age?
[Fark user image 468x263]


FDIC still exists. There might come a day when it is all the insurance that will pay.

I do not know if anyone remembers, but there is such a thing as options not being settled in cases of really big swings in the market. I think it happened in 2007, but certainly in 1987 that people kept writing naked puts and marketing them as hedges because the market kept going up and nobody exercised them anyway. Well. The liability came and it came suddenly to wreck this "low risk" strategy.
 
2020-10-26 9:44:16 PM  

NikolaiFarkoff: I've never understood people's "stickiness" to traditional banks. I've worked in the industry for almost 20 years and haven't held any serious funds in a checking account at a major brick & mortar bank in almost that entire time. There are just so many options and so much flexibility/mobility.


That is true to some regard, but online banks aren't much better at this point. I have an online savings account with a relatively small bank that is still paying me .8% (which is higher than everyone else at this point), and that rate is barely hanging on by a thread and requires a fairly hefty balance (although I'd rather park it there than the questionable stock market).
 
2020-10-26 9:52:32 PM  

NewportBarGuy: You'd earn $6,000,000 per YEAR if you just put $15,000,000,000 in your local savings account and leave it there.

Stupid libs.


You would have done better in your investment than a certain orange dumpster fire.
 
2020-10-26 10:50:06 PM  

MBZ321: although I'd rather park it there than the questionable stock market).


Retiring in a decade?
 
2020-10-26 11:03:48 PM  

2fardownthread: I "know this guy"  who left about 300 dollars  in a passbook in a Japanese bank for 15 years and did not touch it. When he finally closed the account, the bank had been merged twice. He got his money back,

and 40 cents interest.

Do people really do that? People do.

And I guess that means that if you want to know about low interest rates, you should look at Japan for the last 30 years.


I "know a guy" who had $.37 in his bank account, was frozen for 1000 years, and when he was unfrozen, found out his $.37 grew to $4.3 billion.
 
2020-10-26 11:30:14 PM  

dustman81: 2fardownthread: I "know this guy"  who left about 300 dollars  in a passbook in a Japanese bank for 15 years and did not touch it. When he finally closed the account, the bank had been merged twice. He got his money back,

and 40 cents interest.

Do people really do that? People do.

And I guess that means that if you want to know about low interest rates, you should look at Japan for the last 30 years.

I "know a guy" who had $.37 in his bank account, was frozen for 1000 years, and when he was unfrozen, found out his $.37 grew to $4.3 billion.


I know a guy who opened a joint checking account with fifty bucks and two years later the bank drained it for lack of use, despite the guy confirming it wouldn't be when he opened it. After six months of no activity, the bank took it off the website display.

Still worth the gym membership savings for a couple.
 
2020-10-27 12:34:03 AM  
Fark user imageView Full Size
Fark user imageView Full Size
 
2020-10-27 12:41:19 AM  

dustman81: 2fardownthread: I "know this guy"  who left about 300 dollars  in a passbook in a Japanese bank for 15 years and did not touch it. When he finally closed the account, the bank had been merged twice. He got his money back,

and 40 cents interest.

Do people really do that? People do.

And I guess that means that if you want to know about low interest rates, you should look at Japan for the last 30 years.

I "know a guy" who had $.37 in his bank account, was frozen for 1000 years, and when he was unfrozen, found out his $.37 grew to $4.3 billion.


Pretty sure after 5 years the funds are forwarded to the state where it sits interest free until they can find the owner and give him his money.
 
2020-10-27 12:54:41 AM  

cefm: But keep putting money in a savings account, right gramps?


You should have a savings account. In it you should have three to six months bills saved up and you should not touch it.

You would be surprised at how many people can't handle a $1,000 emergency.
 
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