For example this one (there are many more). It invests only in very short-term treasuries or reverse repos issued by the government. Super safe and currently paying 4.74%.
Meanwhile big banks (like Citi) pay basically 0% on checking/savings accounts. (Some small banks are paying close to 5% on savings accounts, probably more a desperate attempt to stop deposit outflows than something they can afford to do, but unlike this money market fund those small bank savings accounts aren't fully government guaranteed. They're only guaranteed up to 250k. Sure we expect the FDIC to guarantee all deposits but there's no legal requirement to do so.)
You can wire money out of this money market fund to wherever you want in a few hours if there's an unexpectedly large payment you need to make. If you can wait a day, you can send it overnight via ACH with no transaction fee. Meanwhile some banks are making it hard to take your money out (an Apple bank customer had to wait two weeks to get his $1,700 out, and even then the bank only let him take it out after a Wall Street Journal reporter contacted them!)
According to economists, "arbitrage" opportunities as blatant and obvious as this shouldn't exist. On $10,000, 4.75% is $40 a month, which is like a cable payment. On $100,000 it's a car payment ... Why do people refuse free money? Am I missing something?
Submitted June 02, 2023 at 02:24AM by WrapProfessional1763 https://ift.tt/eDJ1LKy
