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Author Topic: Savings/CDs  (Read 814 times)
Lethn
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May 29, 2014, 03:27:29 PM
 #21

It depends on the coin of course and crpytocurrencies are high risk, I don't dispute that, but I'd never leave a substantial amount of money with a bank in this day and age lol Cheesy Not unless they had something special backing them. The thing is, anything in the market could 'drop suddenly and lose its value' people just need to decided the return is worth the risk or not, that's how free markets work in general.
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ranlo
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May 29, 2014, 03:36:58 PM
 #22

It depends on the coin of course and crpytocurrencies are high risk, I don't dispute that, but I'd never leave a substantial amount of money with a bank in this day and age lol Cheesy Not unless they had something special backing them. The thing is, anything in the market could 'drop suddenly and lose its value' people just need to decided the return is worth the risk or not, that's how free markets work in general.

The vast majority of the world still uses fiat. As long as this continues, banks are safe. They won't magically lose money; that's what FDIC is for. Think about it this way: if 99.9% of the world is still using fiat (well, 100% since barely anyone uses just cryptos), it is still king. If it magically disappeared, ALL finances would disappear so cryptos would be worthless as well. Being paranoid doesn't solve anything.


 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




















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Lethn
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May 29, 2014, 03:53:11 PM
 #23

It's not paranoia, you've got some research to do on hyperinflation Wink
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May 29, 2014, 03:56:17 PM
 #24

It's not paranoia, you've got some research to do on hyperinflation Wink

I don't see Bitcoin resolving this problem though. I know what hyperinflation is. I just don't view it as being a situation where we're going to hit a high inflation period and people are going to flood into cryptos. That seems pretty far-fetched.


 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




















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May 29, 2014, 06:26:19 PM
 #25

I saved CDs for a while, Im making a cd disc shooter so I can have unlimited ammo, has anyone ever made one of these before?

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May 30, 2014, 06:45:40 AM
 #26

It's not paranoia, you've got some research to do on hyperinflation Wink

Well hopefully before that appears the smarter people will have moved the money out to a safe location.
Depends on the banking system used though
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May 31, 2014, 01:43:49 AM
 #27

So far it sounds like investing all into BTC is a better idea than getting a savings account.

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May 31, 2014, 03:22:05 AM
 #28

contact chase or fidelity and inquire about investing in bonds you can get 4-6%

netspend pre-paid card also has an optional savings account with 5%


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ranlo
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May 31, 2014, 03:34:03 AM
 #29

contact chase or fidelity and inquire about investing in bonds you can get 4-6%

netspend pre-paid card also has an optional savings account with 5%

Where are you finding 4-6%?

Chase's top CD (10 year or 120 month) pays 0.90% APY
Bonds are handled by the government, not by a bank, and theirs are:

Type I: 1.94% APY
Type E/EE: 20 years for 100%, or around 3.5X% APR if we're basing it on compounding (I really don't want to do this math right now)

I'm seeing nothing even close to 6% anywhere, so please elaborate on what you're talking about. And holding your money for 20 years for 3.5% is a bit overkill. If we want to add in inflation to that, you're going up around 70% over that period, meaning the actual APY is really more like 2.6%.


 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




















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Kluge
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May 31, 2014, 04:00:44 AM
 #30

For a somewhat "traditional" reply...

Banks and CUs primarily spend what used to be interest on free or subsidized services, and CUs tend to be more expensive if you use them "unusually." For example, if I want a bank statement from them, it costs $5/month to have them print it out, they started refusing outgoing international wires last year, and charge me a fair amount for things like checkbooks. Rates in savings and CDs there usually match maybe half "real" USD inflation.

Banks, OTOH, offer practically no interest (and usually charge you after fees) but tend to have more features (like mobile banking, no-fee and instant intra-bank transfers, and permitting outgoing international wires). Often, their services are more heavily-subsidized or free, but definitely not always.

It needs to be compared case-by-case. Some credit unions participate in Shared Branching, which is absolutely awesome, allowing instant no-fee transfers if the other person also has a CU participating in Shared Branching. A good many do, but a good many do not, too.  They've started requiring the recipient's last4 SSN, though, which is ridiculous. It may also be worth considering whether or not you believe you'll have a little more "spirit of the law" dealing with regional or even local CUs over corporate banks, which I've found tend to be very "letter of the law" and unwilling to budge on anything. They'll tell you owe them $150 for whatever bogus reason, and fuck you if you disagree. For that reason alone, I'll always stick with my local CU, with staff always happy to act human for me.

No matter what, though, banks and credit unions are where your savings go to die, and nobody should keep large sums of money there unless they're dying and want to "lock in." Their role these days is largely limited to bill paying, bill paying, and bill paying. I don't see any reason to favor bank/CU IOUs over cash for savings, and would suggest Americans favor "real" investments considering CDs usually have negative adjusted return expectations these days.

Fwiw ETA: it's been a while since I've read Mish, but IIRC, service overhead expenses tend to cost something like 1.75-3% of deposits, annually, which would've otherwise been interest you'd be accruing for dirt-basic service. Banks tend to be on the higher side of that range, while CUs are in the lower side. Interest rates have been sliding down fast, but banks and CUs tend to offer many more services these days... mobile banking, instant/free intra-bank or inter-CU transfers, online account management, free debit cards, etc

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