Current Events > Wait how are Savings Account "FREE" exactly?

(+) Yeah! (+)

I am seeing some asking for deposit, others don't ask deposit...

then they say Hey Earn 50 bucks a Year just leave your 5000 here gaining interest. oh wooord?

BUT I yet to see anything of how exactly they do all this without a Fee???

Explain is their a monthly bill for this situation?.

---

Online banks offering big interest rates is them advertising basically.

They make a lot more from your money than they give you in interest.

---

Look at this, it sounds too good. It is basically hey give us your 5000 and in a year it will add 50 bucks to it, the others can't do that/

they crap on the other banks on their site, they can't lie about this right?

https://www.marcus.com/us/en/savings/high-yield-savings

---

They invest your money and give you a small amount earned from that investment.

---

Joeydollaz posted...

I am seeing some asking for deposit, others don't ask deposit...

then they say Hey Earn 50 bucks a Year just leave your 5000 here gaining interest. oh wooord?

BUT I yet to see anything of how exactly they do all this without a Fee???

Explain is their a monthly bill for this situation?.

No fees mean you don't pay an initial or monthly fee to open an account

You just need to keep a minimum of lets say 5,000 in that account to avoid any fees

---

Tropicalwood posted...

They invest your money and give you a small amount earned from that investment.

Oh, you can take your money out if you want for a major Fee I bet???

---

Online banks don't have real-life branches obviously which saves them big bucks.

That's how they are able to give a lot of interest and also pay back ATM fees and still make a lot in profit. Regular banks probably could too, they just don't.

---

The magic of fractional reserve banking is why.

Looked gf posted...

No fees mean you don't pay an initial or monthly fee to open an account

You just need to keep a minimum of lets say 5,000 in that account to avoid any fees

So put 5000, I am guessing you can add more later

then leave it for decades?, which in the end could turn into 20K depending on that APY

now I am understanding this.

---

Joeydollaz posted...

I am seeing some asking for deposit, others don't ask deposit...

then they say Hey Earn 50 bucks a Year just leave your 5000 here gaining interest. oh wooord?

BUT I yet to see anything of how exactly they do all this without a Fee???

Explain is their a monthly bill for this situation?.

That's only 1% interest. If you're smart, you'd make a lot more than that by putting your money in mutual funds or ETFs. Though it's not guaranteed. But that's how the bank can give you the $50--they take your $5,000 and make more than $50 off of it.

---

I use ally bank for an online only bank that offers a better interest rate than banks that have physical locations

---

Joeydollaz posted...

Oh, you can take your money out if you want for a major Fee I bet???

Depends on your contract. I was charged like $10 to open my account (I'll get it back if I close it) and I constantly transfer money from savings due to the risk of someone guessing my debit card number.

---

Joeydollaz posted...

So put 5000, I am guessing you can add more later

then leave it for decades?, which in the end could turn into 20K depending on that APY

now I am understanding this.

You can always add more or withdraw any amount, any time you want.

But if you dip below the 5,000 deposit that's when the fees might come in

---

Damn_Underscore posted...

Online banks don't have real-life branches obviously which saves them big bucks.

That's how they are able to give a lot of interest and also pay back ATM fees and still make a lot in profit. Regular banks probably could too, they just don't.

Goldman Sachs is pretty huge, I figure they can afford this "hey it's free come join" situation.


---

Go watch the part in It's a Wonderful Life where Jimmy Stewart explains banks.

Online banks can generally offer higher rates because they have less overhead.

Nothings free

By having a bank account you are complicit in supporting the stock market which is responsible for the consolodation of wealth and destruction of the middle class
---

Long story short, your bank account is not a safe.

When you put money into "your account" they just note that you have put that money into "your account" but they actually put it into a shared pot of everyone's money, which they then lend out at 5, 10, 15%. Then later when you come back and ask for your money, they just give you $X out of the pot and note that your balance has decreased by $X.

---

The 1% interest doesn't mean anything to the average person. But say you have 40 million dollars in the bank. You could invest that $40 million and make a lot more at the risk of losing it all, or you could put it in several savings accounts that are guaranteed. You would make $400000 for doing nothing.

---

Joeydollaz posted...

Goldman Sachs is pretty huge, I figure they can afford this "hey it's free come join" situation.

A lot of online banks do this.

https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts

Also less than a year ago the best APY%'s were much higher than they are now

https://www.forbes.com/sites/andrewdepietro/2019/04/25/accounts-best-apy-2019/

Because of the financial problems caused by Covid19 APY's have gone down.

---

Looked gf posted...

You can always add more or withdraw any amount, any time you want.

But if you dip below the 5,000 deposit that's when the fees might come in

Oh ok, so they basically take your money and Invest it in stuff...do they even tell you what? lol

provide Loans to others, I seen this Marcus letter saying "We offer 150K but you need to pay 300 a month".

So I know I am understanding why they do, they do that with The Savings accounts.

---

They take the money you deposit plus everyone else deposits and invest it and loan it out. Lets say they generate a return of like 10-20%. They give you 2% or whatever the yield they say is. Theyll give like 5-6% to whatever firms/money managers they dealt with and get to pocket the rest. A High-Yield/Interest Savings Account is really just a marketing term, imo. Basically just a regular banking savings account, but obviously with much better return. Usually the only downside is no debit card and physical branches, etc, but that shouldnt matter. It should be a place for your emergency fund and money you want to park for a while. Even at 2-3% youre only just keeping pace with inflation, so make sure to invest your money in your TFSA, RRSP, 401k, or Roth-IRA etc


---

Joeydollaz posted...

Oh ok, so they basically take your money and Invest it in stuff...do they even tell you what? lol

provide Loans to others, I seen this Marcus letter saying "We offer 150K but you need to pay 300 a month".

So I know I am understanding why they do, they do that with The Savings accounts.

In canada for your tfsa you can choose what it goes to
---

Joeydollaz posted...

Oh ok, so they basically take your money and Invest it in stuff...do they even tell you what? lol

provide Loans to others, I seen this Marcus letter saying "We offer 150K but you need to pay 300 a month".

So I know I am understanding why they do, they do that with The Savings accounts.

Again I'm basing it off my bank so you should just check with yours

---

Tropicalwood posted...

The 1% interest doesn't mean anything to the average person. But say you have 40 million dollars in the bank. You could invest that $40 million and make a lot more at the risk of losing it all, or you could put it in several savings accounts that are guaranteed. You would make $400000 for doing nothing.

I saw a video explaining a bit, ya if you got More in there it is better in the long run

IF it stays at 1% for years I guess.

---

My bank offered a 2.3% rate last fall when I signed up. Now they're down to 1% flat. Sigh.

They're using your money to give out in the form of loans for mortgages and businesses, and they throw you 1% a year for parking your capital with them.

Different banks have different interest rates and minimum balances.

---

NotYou posted...

My bank offered a 2.3% rate last fall when I signed up. Now they're down to 1% flat. Sigh.

They may fluctuate (up or down) as the Fed rate changes. ... This means that an account's APY can go up when the economy is doing well and the Federal Reserve raises interest rates, and it can likewise drop when the economy weakens and the Fed lowers interest rates.

---

Should point out the glaring flaw with banks. Since they require investments using EVERYONE's money, if say they loan out half the money, then everyone is out of work due to a financial crisis. People will pull their money from the banks, more than the banks actually have on hand in fact, which causes them to crash.

This has happened since the beginning of IOUs, and is why some places won't let you withdraw a certain amount without fees.

---

Solid Snake07 posted...

They're using your money to give out in the form of loans for mortgages and businesses, and they throw you 1% a year for parking your capital with them.

Different banks have different interest rates and minimum balances.

Yup that clicked, my cousin got a letter from MARCUS before offering a 150K loan with monthly 300 payments

---

Tropicalwood posted...

The 1% interest doesn't mean anything to the average person. But say you have 40 million dollars in the bank. You could invest that $40 million and make a lot more at the risk of losing it all, or you could put it in several savings accounts that are guaranteed. You would make $400000 for doing nothing.

You can pretty safely invest and reap at least around 4% annually.

You should really only be keeping intentionally sidelined capital in a money market account accruing bare minimum interest rates

---

Tropicalwood posted...

Should point out the glaring flaw with banks. Since they require investments using EVERYONE's money, if say they loan out half the money, then everyone is out of work due to a financial crisis. People will pull their money from the banks, more than the banks actually have on hand in fact, which causes them to crash.

This has happened since the beginning of IOUs, and is why some places won't let you withdraw a certain amount without fees.

Speaking of Banks, they diss them again....

https://youtu.be/7gDdxBSjsNE?t=4

---

Ex-Kefiroth posted...

So-called "High Yield" Savings interest rates have cratered ever since the Fed cut rates back down to zero in March. ~1% is probably about the best you'll find.

It's a bit of a hassle, but if you've got a lot of free cash to float, there are plenty of bonus offers from various banks that you can leverage for a much better overall return (and still virtually risk-free).

see: https://www.doctorofcredit.com/best-bank-account-bonuses/

Good to know, will check it out

According to Marcus they are stay at 1 more than any of those Banks which go mostly down, they basically Mocking the Banks
look at that commercial above lol.

---

CE doesn't even know how banks work. Jesus Christ.
---