How does a 9.3% savings account sound?

[jacoavlu]

same.

the interest is taxed at marginal rate

[ShredtheGnar]

So how safe/stable is this?

For the interest arbitrage how much is someone willing to borrow at a lower percent to put into this to earn 8-10% or whatever it is?

If one believes in this and has cash laying around then it seems like people are earning interest like this.

Would you borrow money at 1% to earn 10%? Borrow at 2%? Where does one draw the line?

Found this article about blockfi which is one of the leaders in the interest account space helpful in understanding how they are able to pay such high interest. https://coincentral.com/blockfi-review/ Would guess that since you can get a loan at around 4.5% that some people are probably putting it right back in to earn the 9% or even more with the USDT. I wouldn’t. Just using fiat USD$ to buy GUSD and collecting the 9% with some extra cash that was sitting in checking. After tax yield almost keeps up with current inflation. Seems like a good place to park extra cash.

[jacoavlu]

Found this article about blockfi which is one of the leaders in the interest account space helpful in understanding how they are able to pay such high interest. https://coincentral.com/blockfi-review/ Would guess that since you can get a loan at around 4.5% that some people are probably putting it right back in to earn the 9% or even more with the USDT. I wouldn’t. Just using fiat USD$ to buy GUSD and collecting the 9% with some extra cash that was sitting in checking. After tax yield almost keeps up with current inflation. Seems like a good place to park extra cash.

i don’t know about blockfi specifics. but my guess would be that funds posted as collateral for a loan, do not earn interest. so it doesn’t make sense to lever up to earn stablecoin interest

the people that lever up in this way are buying btc or eth or some other shitcoin, and i would not recommend this

[Craigslist]

Why GUSD

[ShredtheGnar]

Why GUSD

One of the more transparent and seemingly safer stable coins tied to USD. Also based in US. Here is a link to their site with info. https://www.gemini.com/dollar

[Turf Doc]

0% interest credit card.... student loans 5.3%.... stablecoin interest 10%.... interesting..............................

[jacoavlu]

0% interest credit card.... student loans 5.3%.... stablecoin interest 10%.... interesting..............................

stablecoin interest taxable at marginal rate. borrowing to earn net like 3.5% not a good plan

[Turf Doc]

stablecoin interest taxable at marginal rate. borrowing to earn net like 3.5% not a good plan

Med student. Plus sides of being broke, 0% marginal tax rate!

[CordMcNally]

Med student. Plus sides of being broke, 0% marginal tax rate!

Even more reason not to.

[StarTrekDoc]

The medstudent flip ... Zero interest credit card and bonus credit cards and float to higher interest payouts. Classic.

So if this GUSD is stable and good at 10%. That's a huge number to students living on crackers budget.

[tailwind225]

I am interested in this idea but looking at the BlockFi site, they prominently display a running list of regulatory actions against them, including cease and desist orders from multiple states that appear to be currently under litigation. What are the thoughts on this? Is anyone here comfortable placing 10s or 100s of thousands of dollars in an account with this happening in the background? If they get shut down I would expect a loss of revenue would mean inability to pay creditors which could mean bankruptcy where you would be in the back of the line filing for a piece of whatever is left after whatever assets are left are split up by the court.

[jacoavlu]

I am interested in this idea but looking at the BlockFi site, they prominently display a running list of regulatory actions against them, including cease and desist orders from multiple states that appear to be currently under litigation. What are the thoughts on this? Is anyone here comfortable placing 10s or 100s of thousands of dollars in an account with this happening in the background? If they get shut down I would expect a loss of revenue would mean inability to pay creditors which could mean bankruptcy where you would be in the back of the line filing for a piece of whatever is left after whatever assets are left are split up by the court.

i believe most if not all of these actions are around securities laws. and whether these “interest accounts” are unregulated securities. which they may well be. personally, i think the risk of user funds loss as a result would be extremely unlikely. more likely would be a requirement of securities disclosures, possibly fines. and fwiw i believe blockfi users are in a first position with respect to assets in the case of a catastrophe. so they claim that users would get paid before the VCs and other equity holders would get money back. i believe that’s in the terms. who knows how well that would stick if it came to it

if you were to use the platform, read the terms, and consider if you’re depositing dollars, use wire transfer. earlier in the year they raised their ACH limit to like $25k/day which was nice but they were strict about funds deposited ACH had to stay there 60 days. id rather be able to exit quickly even if it means the hassle of a wire transfer

[greenhat06]

I was curious about all of this too. Started with Ally at 2%+ and now its minimal like everything else. I know this has inherent risk, but if you do your research, BlockFi isn't some "Ponzi" scheme like people have suggested. It's not FDIC insured, which I get as well. So I'm parking a few thousand in there, as well as $50 a month, to earn the 9% interest on USDC and I'm also getting my interest back in Ethereum, which seems like it may be (or already is) the next big thing and actually stick around, similar to BTC. Again, 97% of my assets are Vanguard in VTSAX but this is nice to just keep interesting... and if it hits, it hits. Great.

[CordMcNally]

I was curious about all of this too. Started with Ally at 2%+ and now its minimal like everything else. I know this has inherent risk, but if you do your research, BlockFi isn't some "Ponzi" scheme like people have suggested. It's not FDIC insured, which I get as well. So I'm parking a few thousand in there, as well as $50 a month, to earn the 9% interest on USDC and I'm also getting my interest back in Ethereum, which seems like it may be (or already is) the next big thing and actually stick around, similar to BTC. Again, 97% of my assets are Vanguard in VTSAX but this is nice to just keep interesting... and if it hits, it hits. Great.

Is $180 in Eth a year really going to make much difference in your overall plan? You're going to need more Eth than that to move the needle.

[greenhat06]

Is $180 in Eth a year really going to make much difference in your overall plan? You're going to need more Eth than that to move the needle.

Well, it's 3% of my overall asset allocation... so to answer your question, no - it won't make much of a difference in my overall plan. But with interest rates the way they are right now, I like the idea of having a place to park money in and have it earn some substantial interest with minimal risk. Right now, it's low numbers in terms of money. But I'm in my 30s, plenty of time for those $50 a month to grow, and crypto is obviously still in early phases. If it hits it big, great for me. If not, not a problem, since my favorite 5 letters are VTSAX.