Discussion in 'Retail Brokers' started by tomahawk, Feb 28, 2008.
It's almost as if it's tracking something.. like Fed Funds.. very strange..
Rather right in line with Fed Funds which have gone from 5.25% to 3.00%.
IB also switched from using LIBOR as the benchmark index to Fed Funds.
Effective Fed Funds rate has also dropped a corresponding amt from 5.22 on 9/4/07 to 2.85 on 2/26/08.
You can check Fed Data here:
stop screaming. As a trader you could have been long FF or 2yr futures to compensate. Or even switched the account to a different base currency with higher interest and made some extra $$$ with the plunging dollar.
But then again if you were a successful trader you wouldnt bother coz your returns would be much higher than any interest paid.
Relax, I KNOW it's in line with the Fed Funds rate.
I was just bringing it to people's attention for those who, like me, take things like that into consideration when making decisions about how to distribute their funds. Wheras IB used to be competitive with the better money market rates, I'm getting almost twice the interest at Citibank than IB, and that's new.
I just thought I'd be neglecting my civic duty if I didn't stand up and say something. That's all.
Since when was being long futures or another currency equate to 'risk free' interest earned.
20/20 hindsight rocks.
I have never thought of fine tuning this part of IBs account structure. But Chriz got me thinking...
IB's Account Configuration states: "Base currency is determined at the time of the opening of an account and may be changed at any time through Account Management."
Has anyone changed their account's base currency with IB on a "regular" basis? What are the implications/impacts?
How you going to get twice the interest if it's truly in a money market???? LOL. Ridiculous. Say, Citibank didn't shift some mortgages into your account did they?
Double would be 5.7. The highest rate Citi offers on regular funds is 4 even right now, better, but hardly "almost double". Also note that the 4 is in a promo account. What happens with those is, even with rates not moving, once you open the account they slowly lower the rate over time and offer new promo accounts. Next will be the Super Duper Ultimate Money Account (which will pay the spectacular rate of half of real inflation!).
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