Few questions for depositors.

[Tittiez]

Depositors:
1. What sort of interest rate would you look for from a deposit account? .5%? 1%?

2. Your interest, would you rather have it based on how much of a profit the business/bank makes (You'd make more some weeks & less others) or a fixed interest rate?

3. Would you rather have your deposits in for a fixed amount of time, or until you like to pull out?

If I think of anymore I'll put them up (I know there is more I meant to ask but I've blanked out).

[joecascio]

It's sort of remarkable that you ask if an interest rate of .5 or 1% is reasonable. Only a few years ago, savings accounts returned 6 to 8% interest.

Logically, in a free market, savings interest rates should follow loan interest rates. And banks would compete to get both depositors and loaners and interest rates would find their "natural" level. But interest rates on US dollars are now pretty much dictated by the Federal Reserve, not the demand for loans or savings interest.

Since bitcoin is not regulated by the Fed, there's no reason why both saving rates and loan rates on bitcoin could not be determined by market forces as opposed to political mandates.

[Tittiez]

It's sort of remarkable that you ask if an interest rate of .5 or 1% is reasonable. Only a few years ago, savings accounts returned 6 to 8% interest.

I guess remarkable would be the right word. Maybe those people who offered 6-8% found some amazing investments, but I haven't been lucky enough to find them.

[joecascio]

On the other hand, mortgage rates were running 8 to 9%, which would be just as remarkable today.

[Hydrogen]

It's sort of remarkable that you ask if an interest rate of .5 or 1% is reasonable. Only a few years ago, savings accounts returned 6 to 8% interest.

With banks you're lucky to get .9% APY.

http://www.money-rates.com/savings.htm

I think you're mistaking .6% to .8% for 6% to 8%.

 

[markm]

Not necessarily. I used to get 1% per month for daily interest savings at normal mainstream bank back in the previous millennia a ways.

-MarkM-

[joecascio]

No, I'm not mistaken. Banks really did give out interest rates like that back in the 70s and 80s when inflation was rampant. CDs (certificates of deposit) were the best. Even today, I have municipal bonds that yield 3 or 4%.

[Vod]

I'm getting 1.2% interest rate on my savings account at TD Canada Trust.

[Hydrogen]

Inflation averages approx 3%.

Funds stored with lower than 3% yield means your cash is devaluing.

A 1% interest yield means your savings devalues 2% each year = 20% loss in value over a 10 year period.

A 3-4% bond is close to breaking even but there are risks involved.

If btc loans could sustain 10% - 20% returns averaging near to 17% above inflation with insurance that would be an attractive offer to many.

Even 8% - 10% would be attractive.

.

[Tittiez]

Inflation averages approx 3%.

Funds stored with lower than 3% yield means your cash is devaluing.

A 1% interest yield means your savings devalues 2% each year = 20% loss in value over a 10 year period.

A 3-4% bond is close to breaking even but there are risks involved.

If btc loans could sustain 10% - 20% returns averaging near to 17% above inflation with insurance that would be an attractive offer to many.

Even 8% - 10% would be attractive.

.

Are you talking about weekly, monthly, or yearly?

The .5%-1% in the OP is weekly mind you. With mining investments, loans, and other investments 1% weekly is the highest sustainable but the risks are enormous. .25%-.5% weekly is MUCH safer, so that is why I'm asking if people would still deposit at .25-.5% weekly. I KNOW I can make .25%-.5% but I feel insecure about 1%.

Current bitcoin deposits go from 1-3% weekly, and if they aren't scams then I praise them for their business expertise.

[Vod]

I KNOW I can make .25%-.5% but I feel insecure about 1%.

0.25% per week is still 114% per year, approx doubling what you were lent.

That's not sustainable - you can only have the illusion of being sustainable (like dank's bank) if you only get small amounts of deposits.

Let's say someone gives you 1,000BTC.  At the end of the year, you owe them over 2,000.  That's just 100 people giving you 10BTC.  Where are you going to come up with $12,000 to buy 1,000 bitcoins JUST for interest?