High Interest Savings Leaderboard

https://www.highinterest.io/

by cainxinth • 2 years ago

221 214 2 years ago

highinterest.io

gerad• 2 years ago

VUSXX - 5.29%

netfl0• 2 years ago

ETF?

miobrien• 2 years ago

Money market fund.

Treasury Money Market Fund seeks to provide current income while maintaining liquidity and a stable share price of $1 per share.

jjice• 2 years ago

Tagging into the sibling that said it's a money market, Vanguard ends money market funds in "XX" as a nice rule of thumb

jcdavis• 2 years ago

And, crucially, last year 80% of VUSXX's interest was state tax exempt.

Unless you specifically need the features of a savings account (eg ACH), money market funds are the way to go.

lotsofpulp5• 2 years ago

TTTXX is 100% exempt from state and local income taxes, as far as I know.

bryceneal• 2 years ago

I only recently discovered this.

Are there any practical advantages to high yield savings account, then? Or do they only exist for people who don't understand how to buy money market funds?

nytesky• 2 years ago

Technically not FDIC insured.

I personally like CDs since the rate is locked and everyday someone is calling for a rate cut.

bradfa3• 2 years ago

Money market funds are not protected by FDIC. Savings accounts or CDs from banks are protected by FDIC. Your choice is likely to be made around risk. Granted, I don't think money market funds actually losing value or going to 0 is very common, but with FDIC insurance you have true 0 risk for <$250k per bank.

naniwaduni7• 2 years ago

Well, some people pay <4% investment income tax at the state/local level too.

m3kw9• 2 years ago

As long as you don’t put more than the fdic insured amount in those highest ones

aketchum• 2 years ago

I opened a Sofi account when interest rates started rising after having only a Truist account paying 10 bps. Sofi paid $300 bonus and that was what actually got me to actually make the switch (their average cac must be over $400!). Its so interesting how the switching costs are very low but still feel high enough that it is tough to actually open new accounts even when you can easily earn $500 extra per year per $10k in balance. I wonder if fedNow adoption will make it more common to bank hop without the delays of the ach network

smallmancontrov• 2 years ago

Figuring out how to shit up outgoing transfers is a core competency of any financial institution, so I wouldn't count on fedNow to save us without additional standards forcing good behavior.

iav• 2 years ago

Not to overcomplicate things, but anyone planning to save money for >12 months should be using the BOXX ETF (https://etfsite.alphaarchitect.com/boxx/) to convert the interest income into a long-term capital gain. Even if you end up cashing out before the 12 months, you are still going to pay the same taxes as with a savings account, so there is truly no downside.

MetaWhirledPeas• 2 years ago

What's the rate of return that way? The 5% coming from the bank is pretty nice and is easily understood. I scrolled to the end of that BOXX page and even watched the video, and I still don't understand it.

_ink_• 2 years ago

The Bloomberg article states 5.07% after fees.

KMag• 2 years ago

The short answer is that if you could answer that question in advance to a high accuracy, you could make billions as bond trader. In theory, you get paid similarly to regularly going out into the bond market and buying US government bonds that expire in the next few months, but with a potential tax savings twist. (I am a random Internet dude, not a tax lawyer.)

The returns supposedly track the short end of the yield curve on US Treasuries. That would make sense, as theoretically, the net premium of a box spread is equal to the net present value of the payout (under the no arbitrage assumption). That net present value should be very close to the yield on a zero-risk asset over the same time period. They're using 1 to 3 month options, so in theory, they get yield close to short-term US Treasuries (the market prices a near-zero probability of the US defaulting on its bonds in the next few months).

I haven't looked into the tracking error between SPY box spreads and the short end of the US yield curve. https://en.wikipedia.org/wiki/Box_spread#cite_note-2 says the yield averages about 0.35% above holding equivalent maturity US Treasuries.

Though, it sounds like they're using box spreads composed of American options, so I wonder how they deal with early exercise risk. You only get bond-like performance from a box spread if you don't have early-exercise risk. The further out of the money they place their strikes in the box spread to avoid early exercise risk, the lower the liquidity they get, and higher trading costs.

The tax trick is that they also enter into a delta-neutral trade on a high-value single stock. (They don't use and index for this part because they want the difference between the winning and losing parts of this trade to be as large as possible, so they want volatility in the underlying asset.) At certain points, they realize the losses on the losing half of that trade (reducing tax liability), and perform a tax-free in-kind exchange of units (shares) in their ETF for the winning half of that trade. Of course, they don't know in advance which half will win and which will lose, but it doesn't matter. The brokerage buying their ETF in order to make the tax-free exchange bumps up the price of the ETF, very close to the value of the winning leg of the tax-saving trade.

Note the several caveats above (and probably some I missed) in comparing with US Treasuries yield.

This is not investment or tax advice.

ca_tech• 2 years ago

For a detailed report on the mechanics behind the BOXX ETF, Bloomberg just published this article: https://archive.is/8kq0G It is not a perfect solution for everyone. You do need to take into account your income tax rate and your capital gains tax rate.

infecto2• 2 years ago

The universe has come full circle.

For those of us who cannot resolve archive link.

Article https://www.bloomberg.com/news/articles/2024-02-22/this-exch...

Matt Levine's https://www.bloomberg.com/opinion/articles/2024-02-22/put-th...

hippich• 2 years ago

Can someone explain it a bit better? I am not quite sure why in addition to spx this fund buys options on Bookings? Also, where is the risk in this strategy, besides counter parties risk.

empathy_m• 2 years ago

I keep thinking about parking cash in box spreads on SPX directly -- pay net $98,000 in option premium now and earn $100,000 in a few months, effectively lending to the market at the rate implied by highly liquid option prices.

The section 1256 tax treatment is especially cool not so much because of the 60/40 taxation but because if you have several consecutive years of 60/40 gains you can edit your past year's income by incurring a current year loss and having a carryback loss.

vamega• 2 years ago

I've borrowed money using SPX box spreads. You can get data on the recent trades and build a box spread at https://www.boxtrades.com/

There's a long thread on the Bogleheads forums about Box Spreads here: https://www.bogleheads.org/forum/viewtopic.php?t=344667

andrewla2• 2 years ago

I only just learned about this in Matt Levine's newsletter [1], and assuming they don't get regulated out of existence, it seems almost too good to be true. The effective tax-discounted rate of return on a 5.6% interest-bearing account is really only 3.5% because it's ordinary income (paying taxes of .37 * 5.6). But as long-term gains it becomes 4.3% (paying taxes of .238 * 5.6). And while it is compounding you pay no taxes at all.

[1] https://www.bloomberg.com/opinion/articles/2024-02-22/put-th...

nonethewiser5• 2 years ago

This is hilarious. It's not as risk-free as an FDIC insured HYSA account though. I don't care what the ETF tracks - being an ETF that tracks something comes with some additional risk.

padolsey3• 2 years ago

Yes to that. And this may be my own risk-averseness, but I don't have complete confidence in all these derivative instruments anyway. I don't have time or sufficient interest to look into the construction of ETFs and how their holdings are managed, so I will opt for a mixture of stock-picking, index funds, bonds, ETFs, and just plain old savings accounts at banks I can see on the cold hard cement of the city. I try to be diversified in which financial instruments I choose. It seems most people have blind faith that X or Y instrument are constructed, managed and regulated in a reliable and trustworthy way. They entrust their money into weird mechanisms where they believe they own AAPL stock but actually it's just a derivative slice on precarious terms (fractional shares or other slimey broker-made nonsense).

teeray• 2 years ago

there is truly no downside

What about FDIC?

4star3star• 2 years ago

For someone like myself who is only sophisticated enough to fund an IRA, CD, or savings account, how does one start out with BOXX ETF?

andrewla2• 2 years ago

Open a brokerage account, and buy it just like a stock. If you have an IRA you likely already have an account at a brokerage.

bombcar7• 2 years ago

Go to https://www.bogleheads.org and read until you start to feel the ability to answer questions.

ssgodderidge• 2 years ago

This is cool! I'd love to also see the leaders' rates over time, rather than a point-in-time snapshot. Switching banks is relatively time consuming. I'd prefer to choose a bank with the highest rate over the last 1yr, 2yr, 3yr+ periods.

sahila2• 2 years ago

HYSA are great but even better are buying money market funds or tbills.

Money market funds restrictions are they can be bought/sold during market hours and tbills have a specified lock up period, like a month or more. Both can be bought from your broker, it’s intimidating but actually quite simple.

For example buying money market vusxx fund today is giving an equivalent 6.25% apy for high tax earners in California - this is because much of it is tax exempt whereas hysa is not.

This google sheet has all of the current rates and is useful: https://docs.google.com/spreadsheets/d/1v3fn3sZRvkSgqb-RnN2g...

giarc2• 2 years ago

I'm just seeing a bunch of #NAME errors.

santoshalper• 2 years ago

Same

mdrzn• 2 years ago

Click on the "Instructions" tab at the bottom of the page, you have to create a copy for your personal use. The #NAME errors is caused by the table trying to get data from a tab called "My RateSet" which doesn't exists yet.

lotsofpulp5• 2 years ago

TTTXX at BoA/Merrill is another one.

Although, in a shit hits the fan scenario, I would expect to be able to access my FDIC insured account money more reliably than a money market fund.

7moritz7• 2 years ago

I don't see any reasons not to put everything into diversified ETFs. Low risk, reliably comparatively high returns unless the world economy or the entire US economy crash (which would ruin the value of almost every asset anyways).

dannyw2• 2 years ago

Your emergency fund shouldn’t be in stocks.

dageshi• 2 years ago

What you suggest is comparatively high risk vs tbills and MM funds.

T-bills are literally the safest possible investment bar none.

padolsey3• 2 years ago

Part of that diversification is the money markets, no?

lr4444lr2• 2 years ago

If you have a high likelihood of needing the cash in the next 0-24 months, that risk isn't so low.

yodsanklai• 2 years ago

What low-volatility ETFs strategy would you recommend? let say my goal is to survive inflations and market crash such as 2008 for instance. Personally, I have a very hard time putting all my hard-earned savings on ETFs which can lose a lot of their value overnight.

coryfklein• 2 years ago

Frankly I do this as well. I think it depends on your personal financial situation and how often you expect to be withdrawing from your emergency fund. By increasing levels of "emergency", do you use your emergency fund to pay for:

* Gas because you forget to plan properly for road trips? Keep your funds in cash.

* Your vehicle's regular oil change which happens every couple years and you should be able to plan for? Maybe a HYSA

* Your transmission goes out and you need a new car? Diversified ETFs probably fine

Many "emergencies" can in fact be saved for, which leaves only the truly rare and uncommon ones, which usually don't require that you have all of the emergency fund available as cash at a moment's notice. Also because they inherently only happen on a time scale of YEARS, then in the long run you're just self-insuring yourself and it's a bummer if the transmission goes out in a down year and you have to exit a position, but statistically speaking you'll come out ahead.

2OEH8eoCRo0• 2 years ago

Aren't money market funds only good today because of the high fed interest rate? If/when that comes back down so will the money market rates.

matthewaveryusa• 2 years ago

Higher than 0% yes. Historically rates are still on the low side. And yes they move with the fed rate.

Bluecobra• 2 years ago

Yes. When they start cutting rates that would be good time to buy Treasury Notes/Bonds or longer term CDs so you can lock in the interest rate for a period of time.

anxrn• 2 years ago

And so will HYSA rates.

thesuitonym• 2 years ago

It's my understanding that high yield savings accounts are still the best place for an emergency fund. A tbill might net you more money, but if you're still 8 months from maturity, how does that help you at all?

NordSteve• 2 years ago

Sell the bill? Market is very liquid.

nonethewiser5• 2 years ago

HYSA are also FDIC insured which is no joke. Money market funds are vulnerable to "bank runs" the same way a bank is. There have been times, like in 2008, where you were not able to actually pull all your money out. https://www.investopedia.com/articles/economics/09/money-mar...

I guess technically there is always a risk of 100% loss but in the case of the HYSA that would happen if the United States dissolves. With a money market all you need is a bank run.

matthewdgreen• 2 years ago

Vanguard money-market funds can be exited at the close of business any day: bonds may comprise the underlying assets, but you don't actually have to wait for maturity. The main risk with these funds is that you don't get FDIC insurance. Historically this has not been a problem (for Vanguard), but past results etc.

ETA: in 2008 there was an instance where one fund "broke the buck", but the Fed stepped in and backstopped it.

bombcar7• 2 years ago

It depends on what your emergency fund is for.

Most people posting here have enough unused credit card "headroom" to get them through a month; so the main thing for an emergency fund is that you can get the cash out of it with low or no cost within that month.

Some use bond funds to do it, some use bond or CD "ladders" - buy a bond expiring in 12 months that is 1/12 your emergency fund each month, and in a year you'll have a rolling "self built fund" that you can get 1/12 of every month with no penalties.

Bogleheads forum has tons of discussion around these kinds of things.

purpleblue2• 2 years ago

Credit cards are the best place for an emergency fund. You still all your cash in US-Treasuries, gaining 5+ % interest with no federal tax, and as secure as anything in the world. Then if an emergency comes up, use your credit cards, and you have 30 days to pull money out and pay for it, without losing any of your interest.

divbzero• 2 years ago

If you buy T-bills through a brokerage, you can easily resell them on the secondary market using the same brokerage. The market price climbs as maturity approaches, so you typically capture yield in proportion to how long you held the T-bill.

smileysteve• 2 years ago

You can get the best of both worlds with short term tbill etfs; liquidity and tax advantages, and the raw rate.

HumblyTossed2• 2 years ago

but even better

This is highly dependent on what the intended purpose of the money is.

roland35• 2 years ago

There comes a point where you are optimizing finances beyond what is necessary, in my opinion.

Have a decent plan for your cash so it's earning good interest, then go out and focus your time on the rest of life. Automate as much as possible. Don't worry about a few $10s of extra interest!

rrrrrrrrrrrryan2• 2 years ago

There are times when you need to have a ton of money in cash or near-cash (e.g. saving for a down payment for a first home), and then it makes a lot of sense to optimize.

For a normal emergency savings fund, it does not make sense (unless you legitimately enjoy doing it!)

alemanek• 2 years ago

If your bank account is also at your broker (ex. Schwab, Fidelity) then money market funds are actually more convenient than a HYSA. My money market fund money is available the day after I sell and there is no waiting period to transfer between my accounts at Schwab. Also I can use the money market fund to underwrite cash secured puts or for other investment activities.

Transferring between institutions I have had take 3-5 days before funds clear. Wires can be faster but come with fees and a whole bunch of questions to make sure you aren’t a scammer trying to empty an account.

So, it is good to know about all your options. I keep my 6month emergency fund in SNOXX money market fund. With Fidelity you can set a sweep to go into their short term treasury fund and not even have to sell anything to transfer the money out.

soupfordummies• 2 years ago

I did some cursory reading on money market funds (MMFs) and I don't quite get the advantage if rates are roughly the same?

For instance, if there is a high-yield savings account (HYSA) option that gives 5.3% interest and a MMF that gives 5.4% (with a 0.1% expense ratio), would I not receive the same amount of interest in practice?

Not trying to disagree with you or anything, just making sure I understand the vehicle.

naniwaduni7• 2 years ago

Usually, taxation differences. Also, MMF yields are generally quoted net of expense ratios already, you don't subtract them out a second time.

latchkey2• 2 years ago

5.3% https://www.viobank.com/cornerstone-money-market-savings

balderdash4• 2 years ago

From a practical standpoint they’re the same - it’s the at the margin (MMF is likely to “reset” more quickly than a high yield savings account, you’re also risking it “breaking the buck” in times of extreme stress, + a lot of the income in a MMF you won’t pay state tax on, on the other hand an HYSA is FDIC insured)

greyface-• 2 years ago

tbills have a specified lock up period, like a month or more

What is this referring to? I've bought and sold T-Bills in the same week, and have never encountered anything about a lockup.

balderdash4• 2 years ago

I think they may be confusing it with savings bonds

sahila2• 2 years ago

You’re right you can but/sell on the secondary markets easily. If you buy it directly on treasurydirect.gov, then you might have a lockup depending on the time interval you pick.

3pm• 2 years ago

And there is a way to pay no taxes on the growth. You need to have

1) a tax advantaged account and 2) a regular brokerage with 2x your savings

Technically tax is deferred or literally not paid if tax advantaged account is a Roth.

https://www.bogleheads.org/wiki/Placing_cash_needs_in_a_tax-...

exabrial2• 2 years ago

Id like this same thing but for cds!

bradfa3• 2 years ago

Most CD brokers will let you see all the CDs on offer and give you sorting and searching abilities. I buy CDs through Vanguard (they're my broker) and it's easy to get a table of CDs which match my search terms of duration, amount, and minimum return.

codingdave2• 2 years ago

https://www.bankrate.com/banking/cds/cd-rates/

exabrial2• 2 years ago

Read the fine print here... this is definitely not an exhaustive list

balderdash4• 2 years ago

https://fixedincome.fidelity.com/ftgw/fi/FILanding?bar=p

Gooblebrai• 2 years ago

Great idea. Would love to have the same for the UK!

beejiu• 2 years ago

https://bankaccountsavings.co.uk/

dom96• 2 years ago

Where is the pretty chart and table showing me the interest rates offered?

frereubu2• 2 years ago

My accountant directed me to https://moneyfactscompare.co.uk/savings-accounts/ which I've used quite a bit over the years. Haven't compared it to other comparison sites, but it seems to be pretty good for most basic financial stuff like mortgages too.

fotcorn• 2 years ago

Here you go: https://www.moneysavingexpert.com/savings/savings-accounts-b...

padolsey3• 2 years ago

Raisin: really easy mobile app: https://www.raisin.co.uk/

Flagstone: 10k minimum, old-school but well-trusted, great rates for higher deposits: https://www.flagstoneim.com/

E.g. on flagstone you can get over 5% instant access if you're prepared to put £10k or more away.

asystole• 2 years ago

Monzo gives me 4.6% instant-access and I manage it from the same app I manage my current account in. My savings are fairly modest so it really doesn't seem worth the bother to shop around for an extra ~0.4%.

supsep2• 2 years ago

Trading212 is giving 5% interest for uninvested cash. I started using trading212 and it’s been solid so far.

francisofascii• 2 years ago

Impressive rates. I have been using a ultra-short bond ETF (VUSB or similar) for storing excess cash rather than a savings account. Maybe I should reconsider.

Hasz• 2 years ago

Eh, please include banks that don’t offer an affiliate link.

I use VIO, which offers 5.3% on all balances.

giarc2• 2 years ago

I hovered over a few links and they didn't seem to be affiliate links.

ta1243• 2 years ago

There are many banks which give you far better rates. [0] has 47% for example

Clearly it's not talking about Lira then, but it doesn't mention currency or country

frereubu2• 2 years ago

Error: trying to access array offset on value of type null

hn_throwaway_69• 2 years ago

It should be noted this is specific to the United States.

throw0101c2• 2 years ago

For the Canadians in the audience:

* https://www.highinterestsavings.ca/chart/

* https://www.ratehub.ca/savings-accounts/accounts/high-intere...

There are also 'HISA ETFs' like CASH.TO:

* https://moneyguynow.com/best-canadian-high-interest-savings-...

However note:

The biggest difference between HISA mutual funds and HISA ETFs is that ETFs are not CDIC-insured. This occurs because HISA mutual funds allow investors to be registered with the deposit institution as individual depositors, whereas a HISA ETF bundles the sums provided by all investors and invests the proceeds in the ETF’s name. However, HISA ETFs mostly invest with systemically important financial institutions (SIFIs), which are subject to greater regulatory requirements than non-systemically important ones. In Canada, we have three types of SIFIs.

* https://www.pwlcapital.com/high-interest-savings-account-etf...

dghughes• 2 years ago

A Canadian Tire TFSA ??? WTF? lol

throw0101c2• 2 years ago

You can get a bank account at the grocer, PC Financial at Loblaws, so why not.

* https://en.wikipedia.org/wiki/President%27s_Choice_Financial

voisin• 2 years ago

There are also 'HISA ETFs' like CASH.TO

FYI, I tried to buy this in my TD Direct Investing Account and it wouldn’t let me. I called in and found out TD had blocked trading for any clients in CASH and there was another similar ETF, the #1 and #2 most liquid high interest savings ETFs around. I was told that to trade in these I had to open up a managed account (and pay fees to TD, negating part of the benefit of these ETFs).

I thought this seemed highly unethical and inappropriate and so I contacted a variety of regulators (even trying to find which regulator had oversight of this was a major pain!) only to be told that there is no requirement for investing platforms to be neutral conduits to the markets and that they have full authority to block trading to help their other competing businesses.

Canada: where corrupt self dealing by the oligopolies is the name of the game.

/endrant

Kon-Peki• 2 years ago

If you can handle not being FDIC insured, check out Ford Interest Advantage. This is the money that Ford uses to fund auto loans. In practice, it works like a checking account with ACH deposits/withdrawals.

5.5%

https://www.ford.com/finance/investor-center/ford-interest-a...

sschueller• 2 years ago

In Switzerland we can't hope for anything more than 1%.

pelorat• 2 years ago

I think it's the same in most of Europe.

Leherenn• 2 years ago

Switzerland has lower inflation, a lower reference rate (1.75%) and an appreciating currency. Over the past year, you would have still been better off putting your CHF in a 1% account than to transfer to USD, put in a 5.5% account and transfer back, even ignoring fees.

There are also a couple of places offering around 1.5% fwiw.

paxys• 2 years ago

While it may be tempting to pick whatever is on top of the list, you should make your decision after factoring in bank locations, reputation, customer service, online tools, ATMs, fees etc. rather than just go for the extra 0.04% in interest.

LVB2• 2 years ago

Marcus recently locked my account for unspecified reasons and it took a couple weeks to unlock simply because they weren’t allowed to send a verification code to my phone since it was on a prepaid plan (?!?). Quite nerve-wracking to have all of your “safety” funds inaccessible and stuck behind fairly helpless front line agents that offer no escalation path.

hn83058233• 2 years ago

for unspecified reasons
my phone since it was on a prepaid plan

That is likely your reason (burner phone). Did they ask you for hard evidence of your identity before unlocking your account?

givinguflac• 2 years ago

This is really cool! Any reason Apple savings isn’t included?

shortrounddev2• 2 years ago

Apple savings is a frontend for Marcus by Goldman Sachs, which is listed there

ezfe4• 2 years ago

Marcus and Apple Savings aren't always in sync, they've reached 4.5% at much different paces

machiste77• 2 years ago

Not listed: 5.1% on USDC at Coinbase

babyshake2• 2 years ago

Does this APY not apply to USDC set to buy in limit orders?

ourmandave• 2 years ago

There is some missing nuance if you just look at the list.

Orion FCU is listed at 0.01%, but you can get 6% (on the first $10K) if you open a premium checking acct.

Although you have to deposit at least $500/month and use the atm card as much.

Not exactly what people with large amounts outside their network are looking for, but still.

BitwiseFool• 2 years ago

These sorts of accounts are just not worth the hassle. The interest rate seems spectacular but it's contingent on satisfying conditions that are easy to miss each month. Plus, the fallback rate is punishingly low. When looking at the effort required compared to a "normal" savings account, it's a terrible deal.

tommoor• 2 years ago

Bank of America still paying a cool 0.01% interest, incredible.

lotsofpulp5• 2 years ago

Because BoA sees no benefit from giving a competitive interest rate to people with little money. Anyone with decent savings will have a Merrill account (owned by Bank of America), where they can get an FDIC insured savings rate of 4.92% in “Preferred Deposit”, or 5.2% in TTTXX, which are US treasuries, so also exempt from state and local income taxes.

https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMO...

easton• 2 years ago

Preferred Deposit has a minimum balance of $100k: https://www.ml.com/solutions/preferred-deposit.html

(which might be fine, but most HYSAs don't have that.)

BobbyTables2• 2 years ago

I’m sure they’ll eventually fix the sign mistake there…

no_wizard• 2 years ago

There are some Credit Unions that are offering even higher rates, I saw for a time 6 or 7%, but they sometimes had limitations for either joining the CU or upper limits on how much each account could have (though you could spread money across multiple CDs)

jccalhoun• 2 years ago

I've been using depositaccounts for years to check rates for savings and CDs https://www.depositaccounts.com/

JimWestergren• 2 years ago

Best in Sweden seem to be SBAB 4.25% (3 or 6 months lock). Or, anything better?

eli• 2 years ago

Using a convenient bank is more important than squeezing a few more basis points in yield.

rmbyrro• 2 years ago

Don't keep cash or cash-based assets. Only what you need for personal liquidity and emergencies. The govt will steal your money through inflation. If you don't wanna mess with or don't have enough money saved to buy real estate, buy an index ETF or a real estate fund.

hn83058233• 2 years ago

It's good to keep at least 1 year of salary in savings.

Investing it in other assets can be problematic when the global macro environment falters because you won't be the only one trying to liquidate!

It's not hard to imagine a scenario where the stock market and risk assets in general crash, and then you get laid off.

rrrrrrrrrrrryan2• 2 years ago

A 90/10 stocks/bonds portfolio will outperform a 100/0 portfolio over the long term.

During a market downturn money flees to safety, bonds appreciate, stocks fall, and when you rebalance back to 90/10 you'll effectively be buying stocks at a discount.

The 100/0 guy has no such option and misses out entirely.

velcrovan2• 2 years ago

The 100/0 guy has no such option and misses out entirely.

Not true. The 100/0 guy can buy stocks during a downturn just as well as the 90/10 guy. If we're really talking long term, that is, if neither person is selling, and if both are investing the same amounts regularly, then on average the 100/0 portfolio will outperform the 90/10 portfolio. Looking at history, the reason to go with anything besides 100/0 over the long term has to do with risk tolerance, not performance.

https://investor.vanguard.com/investor-resources-education/e...

hatch73• 2 years ago

And not one intelligent person is asking, how is the bank giving me a return for seemingly nothing?

HYSA investments are wildly irresponsible and risky. They degrade the financial system and support horrible practices and institutions.

I challenge anyone to find ONE financial instution which discloses what HYSA is invested in.

These aren't even good investments. VTI is up 25% y/y. With these "high interest" investments below the prime rate, you're literally guaranteed to lose money, all while taking a massive and unncessary risk.

erehweb• 2 years ago

Where's the risk. It's FDIC insured, no?

somehnguy• 2 years ago

Since when are High Yield Savings Accounts investments? They're FDIC insured bank accounts and inherently (essentially!) zero risk.

hatch73• 2 years ago

The point is they're not zero risk. You are safer investing your money into an index fund ETF.

And if you consider them safe, then accept my challenge to find a bank which discloses what HYSA is invested in.

Or better yet, do the research yourself and prepare to be amazed and disgusted to see how the proverbial sausage is made.

And to the person clamoring on about FDIC insurance, I also invite to look up how many deposits it actually covers, while reiterating that they still have not yet found a single bank which discloses what HYSA investments are in.

The Wealthfront reply is on to something, by finding an article which alludes to mysterious "banks" your money is lent to. Do more research about those "banks" are, though. It's not at all what you think.

mattgreenrocks• 2 years ago

HYSA has always been the place for emergency funds for me. Very different from an investment. Do people use HYSAs for investing?

carlosjobim2• 2 years ago

They lend your money out to other people paying a higher interest. In fact, they lend your money out several times.

Even if your bank pays 0% interest, they are lending your money out many times over to people who pay the bank interest.

carlosjobim2• 2 years ago

Reply to the poster below me, who was censored for some reason: AFAIK the money that people have in their bank accounts are used as reserves for all loans the banks give. I don't know of any separation of funds.

cj2• 2 years ago

These aren't even good investments. VTI is up 25% y/y.

It's easy to say this today, but a year ago today the majority of "experts" were saying we were heading for a recession (which never materialized). It was anyone's guess whether VTI would have been higher or lower y/y.

HumblyTossed2• 2 years ago

Haha, you do you, man. And good luck to you.

mmiyer• 2 years ago

The bank gets 5.4% from the federal government.[1] HYSA rates closely track the federal funds rate, because the banks are essentially passing on the fed funds rate to consumers (minus a cut for themselves). The bank can also get 5.3% from short term treasuries right now. So the answer is basically that the federal reserve is giving the return.

1. https://www.federalreserve.gov/monetarypolicy/reserve-balanc...

hatch73• 2 years ago

This is hilarious. You actually think the Fed is paying everyone's HYSA yields?

So, let me get this straight, you actually believe "Customers Bank", for example, which is currently offering 5.32%, is going through all the trouble of investing your money to get a 0.08% return from the same?

Or is it possible these HYSA institutions are investing your money into other, more risky investments, like foreign banks, for example?

Again, I have to wonder and ask, why has no intelligent person done the due dilligence to find out what their money is invested in for such a generous return, as they should for any other financial vehicle?

Literally not one person in this entire post can provide evidence of what their bank invests HYSA funds in. This is how financially illiterate we are.

hn83058233• 2 years ago

Top of market interest rates are a signal that the bank needs capital (yours).

Be careful with more than $250k in any one regional bank right now.

keeganjw• 2 years ago

This seems like a fair assessment. Especially for all these tiny banks that are absolutely not too big to fail.

bombcar7• 2 years ago

That's a good rule of thumb for anyone (but if you have a quarter million in cash equivalents you're probably a business or super-wealthy).

I wonder if anyone has done a correlation study with bank failures vs CD/HYSA rates. The ones I know of that "everyone" flowed into have survived.

userabchn• 2 years ago

Kaupthing [1] was offering very attractive interest rates in 2007.

[1] https://en.wikipedia.org/wiki/Kaupthing_Bank

ezfe4• 2 years ago

Missing Apple Card Savings, which yes is currently the same as Marcus by Goldman Sachs but hasn't always been

decafninja• 2 years ago

HYSA may not be the absolute best thing, but they're simple enough for dumb laymen like me.

At some point I might transfer some, or all, funds out of my HYSA but for now it's good enough to park things in while I do some more research on what options I have.

lr4444lr2• 2 years ago

Can someone clarify for me what the other pros and cons would be for these different banks aside from interest rate? Should I perhaps not go for an extra 0.05 - 0.15% if there are unusual rules around withdrawals, or are some known to have shady data privacy practices?

gfiorav2• 2 years ago

For folks who don't know: In these HYSA, every time the interest pays (monthly), it triggers a taxable event. This might be important for you to consider. If you invest longer term in bonds and good securities instead, you could time your tax better (i.e.: sell when your income tax is lower; retirement).

In the US, you can get "lifetime/permanent insurance," which has a cash component that can be invested in bonds and enjoyed on much better tax terms (eating less into your bond's return).

This is not financial advice.

bombcar7• 2 years ago

There are many tax-advantaged accounts and methods that would likely come in before "perm life insurance" unless you're an insurance salesman ;)

gfiorav2• 2 years ago

So I hear! Which ones would you recommend?

scop• 2 years ago

Interesting that Evergreen Bank Group went straight from 0.35% to 5% in a little over a month. Every other bank had gradual rate increases. Anybody have any info on this?

flerchin• 2 years ago

I noticed that too, and significantly behind the market. It makes me wonder if they would be behind the market when rates fall too.

dia80• 2 years ago

This warrant's a little caution, there may well be some negative selection bias here. The banks most likely to go bust are the ones most desperate for cash so they offer the highest interest rates... If it's FDIC insured you are good up to $250k but I don't know exactly how much inconvenience is associated with your bank going bust and potentially collecting FDIC insurance.

chrisq21• 2 years ago

This might not be the norm, but when SVB went bust FDIC insured money was paid out in a matter of days.

teekert• 2 years ago

In the Netherlands best we can get is 2.85% or so.

tempaway55641• 2 years ago

In the UK banks will create a new high interest savings account and then after a few years quietly reduce the interest rate and launch a new one. So you waste lots of time applying to open new savings accounts every few years. Not sure its worth the hassle unless you're loaded enough that the interest will offset the wasted time.

ApolloFortyNine• 2 years ago

There's a an etf USFR that tracks the treasury notes all these companies buy anyways. Buying it you can use your favorite brokerage and sell whenever you want, without having to deal with another bank or the interest rate at your bank becoming less competitive.

scruple• 2 years ago

The list is missing American Express HYSA. It's at 4.35% APY.

PieUser• 2 years ago

Theres a much more comprehensive list here: https://www.doctorofcredit.com/high-interest-savings-to-get/

grumpwagon• 2 years ago

Also, I believe doctor of credit is not funded by affiliate links like most sites that list this stuff are (including the GP link, I believe)

TMWNN• 2 years ago

I really miss how Vanguard used to allow writing checks from its brokerage account;[1] it combined the best of savings and checking accounts (complete with a six transactions-per-month limit, back when that was a thing). Is there something like it elsewhere? I have accounts at Vanguard and Schwab; I think I've heard that there is something like it at Fidelity but don't know anything about it.

[1] I am not talking about <https://personal.vanguard.com/us/whatweoffer/accountservices...>

EVa5I7bHFq9mnYK• 2 years ago

4.97% in Fidelity for money just sitting in the account. No need to buy, sell, lock, transfer or do anything. Not FDIC insured but I somehow trust Fidelity not going under.

velcrovan2• 2 years ago

If you're a US citizen, don't sleep on I-bonds for your emergency fund.

The current rate for I-bonds is 5.27%. It adjusts up or down automatically with inflation. The only catch is you can't put in more than $10k per calendar year, and if you withdraw before 5 years you give up 3 months of interest. Much, much better than a CD.

https://treasurydirect.gov/savings-bonds/i-bonds/i-bonds-int...

maerF0x0• 2 years ago

afaik it includes more than citizens such as Permanent Residents (Green card).

but i cant find a definitive place that says who's eligible

Onward5818• 2 years ago

For the Dominicans in the audience: I made a tool like this one one for our market.

http://crecepesos.com

latchkey2• 2 years ago

VIO Bank is classified wrong and should be at the top of the list.

https://www.viobank.com/cornerstone-money-market-savings

testernews• 2 years ago

I’ve been using https://apy.fyi/ since it’s Show HN (https://news.ycombinator.com/item?id=33058601). I haven’t checked it in a while but there are significantly less entries on it now compared to this one

ryandrake• 2 years ago

Optimizing one's savings rates always seemed to me to be high effort, low reward. Like coupon clipping or credit card churning. You either live with convenience and low returns or you get a slightly better return by making "opening new accounts" your entire life.

I already have a credit union account for checking, multiple brokerages, an HSA account, a 401(k) account (different from my brokerages), a Roth IRA account, a 529 account, an account at TreasuryDirect, and probably others I'm not thinking of. Now if I want the best yield savings, I need to open yet another bank account? If I want the best CD rates, I'll need further another account? Yuck!

And when I want to move funds from one asset class to another, it's a ACH transfer or some other needlessly multi-day transfer from one institution to another. It's exhausting.

bhelkey• 2 years ago

The value of optimizing here is really easy to estimate.

You know how big your emergency fund is, your current interest rate, and the interest rate you could get.

If you have $5000 in BOA (0.01% APY), switching to one of the listed HYSA (~5% APY) nets you ~$250 a year.

Is the convenience worth the opportunity cost? That's up to you to decide.

babyshake2• 2 years ago

I'm pretty surprised to see notable differences between Wealthfront, Betterment and SoFi. I'd assume these types of services would be in a dead heat in terms of the interest offered.

anonu• 2 years ago

6 month treasuries through XHLF... 3bps management fee, yielding above 5% can be traded in any brokerage account: https://bondbloxxetf.com/bondbloxx-bloomberg-six-month-targe...

moneyaccion• 2 years ago

Who created this?

High Interest Savings Leaderboard

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