Today is a shorter, solo episode and I talk all things cash. This may seem like a boring topic because cash as an asset class really hasn’t mattered much over the past 11 years. We’ve all been accustomed to seeing the 0.05% (.0005) interest rate in your checking account, so it was basically a lost cause to think about putting your cash to work and actually getting a return on your balance.
However, as the Federal Reserve has raised interest rates, one of the benefits of this monetary policy change is a higher return on cash deposits, but not all banks are created equal. While you may not have seen much of a change on your rates at your brick-and-mortar banks, the rise on online-only banks has added an additional competitor to the field…all vying for your deposits. Because these institutions don’t have near the overhead, they can offer higher rates to consumers and thus have added additional competition to the banking industry.
In this episode we discuss the history of cash, how interest rates are set by banks, how much cash you should have on hand, and various strategies and options to consider with your cash-on-hand. Towards the end of the show I also talk about taking these same principles and making sure you understand your cash options within your investment account(s) as well.
Resources:
https://www.youtube.com/watch?v=07G23zMGa4g
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