High interest savings

Discussion in 'Economics' started by pitz, Dec 29, 2009.

  1. pitz


    How can outfits like "American Express" (whatever the f*ck that is) offer "1.5% APY Savings Accounts", when niggas like me can borrow from Interactive Brokers for 0.75%/annum?

    Yes, I have to pledge collateral to IB -- but just how does IB get its funding anyways? Because certainly IB is out there competing for deposits to fund the margin accounts as well.

    Someone plz explain. Can IB take customers' securities to the Fed's discount window and get cheap loans against them??
  2. 1) The "carry trade".
    2) Please describe yourself as a "HipHop American" instead. :cool:
  3. kxvid


    Just wait until all the stocks bought on low margin interest start to unwind. This rally was fueled by low margin interest, among other things. Even a small correction could percipitate lots of margin calls and forced selling.
  4. If someone from 10 years ago heard you say 1.5% interest was "high interest savings"they would've thought you were a loon.

    Amazing how things can change in 10 years.