Interesting that there was a bit of unbundling of banking services and now the players which did well-ish are starting to do reverse unbundling: Wealthfront gets AUM from e.g. the larger banks then offers this to gain greater share of shorter-term assets.
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And the mechanism of the sweep program has to be directing these deposits into banks with a higher cost of funding than what Wealthfront offers, i.e. generally smaller banks, many of whom would otherwise have to build direct-to-nationwide-consumer pipelines to compete for $.
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Interesting times as the perceived velocity of consumer-sclae money increases. (This is happening not so much because ACH windows are shortening, although I will bet you they are, but more because all of your money basically lives on your phone and you're N taps to move it.)
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(Yeah I know technically speaking it is in the cloud just like your data is in the cloud but from an end-user perspective it's on the device that's in your hand 5+ hours every day and instantly responds to your whims like everything else on that device does.)
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Would you use it?
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Yes, although the amount of short-term cash I have in USD is usually really not material and therefore the difference between 2.24% and the 2.05% I get right now means that strictly speaking I'll lose money opening the app to accept the offer.
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FDIC insured to 1 million? That’s a new one for a consumer savings account.
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Same old FDIC insurance, new method of deploying it; they shard the deposit over 4 banks. (InteractiveBrokers uses a similar strategy; they do 10 or 11 banks IIRC.)
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