Why do only online banks offer this? If the rate is 6% and you put in 100k, then does it stay 6% for as long as you have the money in there….even if it’s years? How safe is this and why aren’t more people doing it.
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> Why do only online banks offer this?
Online banks need to attract customers, and this is one way they do it. They tend to have less overhead and so can offer higher interest rates
> If the rate is 6% and you put in 100k, then does it stay 6% for as long as you have the money in there….even if it’s years?
No, rates can and do change over time.
> How safe is this and why aren’t more people doing it.
Perfectly safe as your money is FDIC insured. A lot of people do it, but 6% is a pretty bad rate of return. The S&P 500 has a 12 month total return of over 21%. And that interest has zero tax advantage so you are fully taxed on it.
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