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Comment by schammy | Hacker News Reader

I know of no such bank offering interest rates even close to that. You're talking 2.5% - 5%. That's unheard of these days. At my current bank, $1M in a money market account would generate about $2,500/year, which is nothing short of insulting. Who are these fabled banks offering 10x the interest rate?

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I think your mistake is in assuming that he meant a standard, FDIC-insured savings account by "in the bank." It's not terribly hard to find ~5% dividend yields in the stock market, particularly if you look outside the United States.

Further, in the US, once you have a net worth of a million dollars, you qualify as an accredited investor, opening up a plethora of new investment opportunities to you.[1]

[1] http://en.wikipedia.org/wiki/Accredited_investor

Just a quick search shows me 2.39% for 100k in a 5 year cd. (I can think of any number of reasons you might not want to do this.)

I'm guessing for a million you could do better.

Perhaps you'd only be at the lower bound of the numbers I gave but the point still stands that compound interest is what is making the rich richer.

ING Direct gives you 110bps, 125bps fixed rate if you are willing to tie up your money for at least 2 years. Several other internet-only banks will do the same. As for 250-500bps, I have no clue where to get that. Maybe he meant you can get 5% with a S&P ETF?

Before the subprime crash in 2007, interest rates were well in that range. I had an ING savings account(regular savings account, not a CD) with a rate that was earning me $7 per day, as opposed to now in which I get maybe $2 per month.

Yeah, I know, interest rate used to be good. I used to get 5% on my emigrant direct savings account. Now it's 1%, and I don't know of anything higher (for a money market account anywys)

> Who are these fabled banks offering 10x the interest rate?

As usual it depends on country. In Australia the standard savings rate is around 4% at the moment. I can go to my bank and get 6.2% PA term deposits on a 7 month term.

Indeed, (relatively) risk-free interest rates available for modest amounts of money currently do not exceed the rate of inflation; money in the bank is money declining in value.

California state bonds are in this vicinity. Rates of return vary. Tax-exempt.

a close friend just put away ~$2.5M for a year and is only getting 1.25%. They're more concerned with stability/low risk than growth.

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