[mikewarot]

>Banks are, at their core, facilitators: depositors lend their money to a bank, for which they are paid interest, and banks lend that money out, again for interest.

That's not why I have a bank account. It's how you avoid paying fees to get checks cashed. If you want interest, you put it in a savings account, or a CD, also in a bank. The only safe alternative is savings bonds.

If you want to gamble the money, then you invest in stocks, bonds, etc.

[esja]

"depositors lend their money to a bank, for which they are paid interest, and banks lend that money out"

... isn't how banking actually works.

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

[sramsay]

Yeah, it's the "and banks lend that money out" part that is wrong, and it's why banking is way, way more complex than people realize. There's a lot of "it's all very simple" going around (here and elsewhere). It is not simple.

[ISL]

Those free services are the "interest" you receive in return for your deposits.

[coldtea]

Don't give me interest then. Just store the money.

If I want interest I'd then switch to another type of account, that I explicitly allow to lend them out for this purpose.

In fact, they should have seggregated isolated-from-others-in-default accounts, with different fractional reserve percentages...

[gen220]

This is how the banking system works.

As fiduciaries responsible for managing millions of dollars in capital, founders/VC have a responsibility to understand the parameters of the financial game they're playing.

Any competent financial risk manager has a well-worn playbook of solutions to the problem of "how do we put money in short/medium/long-term storage?", that are appropriate in accordance to how big the pile is and how liquid you need it to be.

If we disagree with the rules of the game, the proper solution is to lobby to have them changed and debate the merits in the court of public opinion, not to live in ignorance of the rules and cry "contagion" to be made whole, when we're faced with the consequences of ignoring those rules.

[micromacrofoot]

CDs are more valuable to banks because they prevent you from making a bank run by requiring you to keep your money deposited for a set amount of time. They're still investing that money. They also invest the money in savings accounts.

Putting your money in a bank is essentially the same as investing it, but with a few more safeguards that you're exchanging for losing out on profit.

[softwaredoug]

Random internet tip: if you have any significant savings, and you don't need liquidity, it's been waaaay more profitable to buy 6 month treasury bonds

[javajosh]

That was true last week. https://www.marketwatch.com/investing/bond/tmubmusd06m?count...

[softwaredoug]

Oof! Still hard to find a savings account that pays > 1%.

[zamnos]

https://www.nerdwallet.com/m/banking/standout-online-savings...

Get 3.3%, at least.

[gen220]

Marcus by GS has been paying 3.75% since mid-February! They've been pretty good for a while, now