[firsthummus]

It should be clarified that the advice is to purchase short-dated Treasuries, which have negligible exposure to short term volatility (and are typically the place people park money in times of distress).

Also, an important note is that none of the major banks in the US pay 4% or anywhere near that amount on deposits. Think 0.01%.

Long term bonds, as you correctly point out are extremely sensitive to changes in interest rates.

In the current (rather unusual) situation, where deposits pay nothing and short term Treasuries pay reasonably well, this advice is sound.

[stouset]

> none of the major banks in the US

Literally all you have to do is just stop using shitty megabanks. It isn’t even hard.

[kevin_thibedeau]

You can get 4+% at US online banks. Short term CDs have been over 5% for the past year. You have to skip the brick and mortar banks with high overhead.

[js2]

Ally Savings right now is 4.2%. Their high-yield 6 month CD is 5%. Both are subject to state and federal income tax.

FDLXX 7-day yield is 4.93%. 99.5% exempt from state income tax.

The most recent 4-week treasury is 5.24%. Exempt from state income tax.

There is very very slightly more risk in the FDLXX MMF than a savings account.

I started using Fidelity as my primary "bank" years ago and haven't looked back.

[silisili]

Same. I'll admit I didn't want to, because I hate their dated website and app so much.

But once you sit down and compare features, absolutely nothing comes close to Fidelity.

[attentive]

I'd say Vanguard's VUSXX at 5.26% clearly beats it.

[js2]

I was with Vanguard for many years. Fidelity has too many things I like to split between two brokerages. Using 4-week treasuries on auto-roll is close enough to VUSXX for me. You really can't go wrong with Fidelity, Vanguard, or Schwab if all you need is a brokerage. But Fidelity has a much broader set of products that it offers compared to Vanguard.

https://www.bogleheads.org/wiki/Fidelity:_one_stop_shop

[silisili]

That's if you're only judging by APY. Vanguard has an atrocious app, and is missing many 'bank-like' features that Fidelity provides - I've enumerated some in a sibling comment. I don't think Vanguard even has a debit card, unless that's changed recently.

[attentive]

If you want to pay $330/year on $100k or $1650/year on $500k to Fidelity so they can pay themselves 0.42% expense on MM fund (atrocious if you ask me) but have a pretty app, that's of course your choice as a customer. I'd spend it on something else.

There is also something to say about diversification across finance orgs. I am not sure having all the funds for banking and investing using the same org is healthy. Diversification helps with SIPC/FDIC/FCUA coverage too.

[Slix]

What kind of features?

[silisili]

High APY ( ~5% ). Keep in mind this is a MM account that works exactly like checking. I don't have to worry about the money in it - don't have to reinvest money earned myself or sell to spend money - it's all transparent. When you spend money, it works, and you'll just see it removed from your MM balance. I mention this because Schwab has a similar account, but makes you manually buy and sell holdings instead as needed.

In above account, you can also make selections here to not need to pay state tax on earnings, but that doesn't apply to me anyways. Nice for people in high tax states, though.

Paper checks in a checkbook. This is something you'd assume is standard but actually hard to find at online banks today.

Debit card with ATM fee rebates worldwide. I don't travel worldwide much anymore, but there's only 3 or 4 banks total that do this and it's a nicety.

Instant P2P between accounts. I often send my wife money for various reasons. This is another one that's surprisingly not standard at a lot of banks.

Free same day wires. Very straightforward, no hassles here, though I've only used it three times.

Customer Service. When you call them, someone in the US answers within a few seconds. They'll talk investing with you, goals, or general troubleshooting things. They also call to check in about twice a year which I find annoying, but some people might like it.

Money guarantee. Luckily I haven't had to use this yet, but any money stolen from hackers/fraud is supposedly 100% covered by Fidelity.

[Dalewyn]

Currently trying to figure out where to start with an IRA (probably Roth) after learning about it recently and seeing it's something I probably should have started like over 15 years ago...

Which would you suggest between Schwab and Fidelity? Is it something I can/should easily do by myself as a financial layman? I have no experience with either of them, though I am slightly leaning towards Schwab since they have some tie-ins with American Express whom I like.

Trying to read up on this is almost worthless because past a certain point it's all just snake oil peddlers wanting me to part with my money (eg: all the Vanguard fanbois).

[cagey]

One feature I found rather unique at Fidelity (I too have recently migrated there as my "one stop shop") was free outgoing domestic wires ($100 minimum). Being able to "teleport" money within an hour to another pre-registered account (before 3PM ET on biz days, in my experience) facilitated switching to Fidelity while still keeping old bank/CU accounts minimally active without having to engage in a lot of thinking ahead about balances (and worrying about EFT/ACH hold times) at those now peripheral accounts.

[BobaFloutist]

The only reason I currently have a Fidelity account alongside my Vanguard account is Fidelity also offers a 2% across-the-board cashback credit card that auto-redeems points straight into my money-market account (albeit at $50 intervals).

[chomp]

> none of the major banks in the US pay 4%

I'm getting 4.4% with Apple.

[loeg]

Yeah, but money market funds pay 5.2% or whatever.

[tompccs]

if savings rates in the UK were as bad as they seem to be in the US then I admit I would be tempted.

However, a shock at the wrong time can cause those "safe" T-bills to suddenly be much less than what was paid for them. Something similar happened to Silicon Valley bank - it wouldn't have been a problem if their depositors hadn't all demanded their money at once, but these are the scenarios that banks are regulated to avoid.

[zbobet2012]

You've a mis-understanding of how funds like FDLXX are managed. In a T-BILL only fund even a decrease in past asset value doesn't matter because they are by law managed to 1$ of net asset value. That is they most hold 1$ of _current_ asset value for every 1$ deposited _at all times_.

The only situation where the value of the fund can be less than what you put in is the collapse of US currency, which savings account insurance can not protect against either.

[tivert]

> The only situation where the value of the fund can be less than what you put in is the collapse of US currency, which savings account insurance can not protect against either.

I don't think so: suppose the company offering the fund was mismanaged and failed to comply with the regulations. Maybe not likely, but definitely more likely than the "collapse of US currency."

[zbobet2012]

Sure, but you are most likely using these funds as core positions in an account which is SPIC covered to 500k.

If you have more than 500k of assets in this form, you should have multiple funds and bank accounts.

Again, you need the collapse of the US currency if you are a) not exceptionally wealthy or b) not wealthy and incredibly financially uninformed.

[Dalewyn]

>important note is that none of the major banks in the US pay 4% or anywhere near that amount on deposits.

Tell us you don't live in America without telling us you don't live in America.

Anecdata: Bank with US Bank, enjoying 4.16% interest.

[fragmede]

that phrasing is a stupid and annoying passive agressive way of calling someone out, but it's when the person saying it gets it wrong, it's really embarrassing for them.

Specifically, Wells Fargo, Chase, and Bank of America still offer "savings" accounts with APYs of around than 0.05% APY as in way less than 1 percent.

0.05% APY https://www.wellsfargo.com/savings-cds/platinum/

0.01% APY https://www.chase.com/personal/savings/savings-account/inter... - https://imgur.com/a/eFILVca

0.03% APY https://www.bankofamerica.com/deposits/bank-account-interest...

[Dalewyn]

The criteria is and I quote: "none of the major banks in the US pay 4% or anywhere near".

US Bank is the 5th biggest and 2nd oldest bank[1] in the US and currently has a money market savings account with 4.25% APY[2][3] for balances over $25,000 depending on your location, if they are not major then neither are any of the others.

If you don't know US Bank, as was the case with another commenter, that is not my problem.

[1]: https://en.wikipedia.org/wiki/U.S._Bancorp

[2]: https://www.usbank.com/bank-accounts/savings-accounts/elite-...

[3]: https://archive.is/kpmUq

[fragmede]

But if your claim is that the other commentor doesn't actually live in America, based on the evidence of them not knowing about US bank (or any of the many other places that offer a HYSA), you'd have to give evidence that all Americans have heard of US bank's HYSA. Instead of doing that, you're trying to make it seem like I've never heard of US bank (I have, thank you), (or any other place's) HYSA, which doesn't address the question, which is: does someone not knowing about HYSAs expose them as being non-American? Now, I bank at a place with an HYSA, so I'm aware of them, but if you talk to people in America, you'd be surprised how many of them don't have an HYSAs or even know they exist, because I named the pathetically low APYs at the 4 largest banks. What makes them large is the number of Americans who bank with them and their assets. So we can safely assume that, of banks, the sum of the number of Americans banking with the first four is larger than, by your comment, the fifth largest bank. Thus, it seems like most Americans probably actually don't know about US bank's HYSA, because otherwise they wouldn't be the fifth largest bank, but instead be any rank higher.

By the by, for those who don't have $25k in cash to sit around (which is a whole other conversation), if you look around, there are places with HYSAs that don't have that minimum, so I'd suggest putting your money elsewhere.

But let's pretend you're right and that I hadn't heard of US bank's HYSA. Instead of claiming that not knowing about that must also make me not a person of the USA, but also that it is my problem, which is a very American way to respond to something, so bravo there if you wanted to give the impression that you were), you shifted the conversation away from your earlier claim that not knowing about US Bank's HYSA made them not American and instead goaded me by trying to make projected ignorance of their offering my problem, and not a trait inherent to non-Americans. Good luck with that.

[Dalewyn]

I am sincerely not sure what the hell your text wall is trying to get at.

The claim was that no major American banks offer ~4% interest on deposits.

I demonstrated that such a claim is wrong. Twice.

If you don't know the banking situation in America for one reason or another and aren't actually qualified to talk about it, that is not my problem.

[fragmede]

Your statement that I responded to was

Tell us you're not American without telling us you're American.

If most Americans aren't aware of a thing, it's not a good signifer or use of that statement.

Keep it classy, questioning my qualifications and saying that's my problem on such a basic topic isn't a good look.

[stavros]

Anecdata: Bank with US bank, enjoying 0.01% interest (Chase).

[happymellon]

That just sounds like poor personal decisions.

[stavros]

No, it's a fact that Chase, one of the major banks, offers nowhere near 4% interest. The GP made a snarky reply that "US bank" offers 4% interest, without even naming the bank.

[Dalewyn]

US Bank is literally the 5th biggest and 2nd oldest bank[1] in the US.

[1]: https://en.wikipedia.org/wiki/U.S._Bancorp

[stavros]

Huh, I've never heard of this. I thought you meant "a US bank".

[happymellon]

I'm not American, and I've heard of US Bank.

Besides, just because you don't know US Bank doesnt stop it being a poor personal decision to bank with Chase when you know they give bad rates.

[stavros]

You're right, I'm I'll-informed and make bad financial decisions, I'm sorry.