Banks are desperate to attract cash-rich time-poor customers
Earning more than $150K a year?
You are most likely to be working in Medicine, Law, Tech and Finance. Demanding jobs both to get and maintain to be sure. The last thing a young doctor or lawyer wants to do at the end of a long week is to manage their finances.
This costs them dearly, potentially well over $100K in their lifetime of hidden costs and fees in banking and investing. Banks are desperate to target these cash-rich time-poor customers to power their profitability for the next 16+ years.
The average amount of money held in a checking account for someone earning over $160K is more than $42K. The average interest rate for a top bank in the US is — 0.05% — pretty much nothing. On the other hand the banks can lend that money out for anything up to 12%.
What about savings accounts? As the name implies these are accounts in which customers save their money — they have restricted access to it and in turn, the bank pays high interest. Or do they? A review of checking and savings accounts by the biggest banks in the US shows that for all but 1 there is little or no difference between checking and savings accounts. You can see the source data here https://tinyurl.com/t4o95ep.
This means that even if you are putting the effort in to move money into your bank’s savings account — it’s likely to be earning pretty much nothing regardless. So why do so many people put money with these banks?
Over $12 trillion is deposits held by the top 15 banks alone.A lot of the reason is the banks spend a lot of money convincing us that they are great value — the top 6 banks spent over $10bn in marketing in 2018. They also have a lot of methods to hide the reality of their underlying value. Here are the top 5 to watch out for.
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