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Comment by mjh2539 | Hacker News Reader

4.15% is still well below annual inflation.

You state that as if savings accounts ever paid better than inflation. And in nearly a half-dozen decades of walking this Earth, I don't recall ever seeing that happen. Of course a savings account pays below inflation, it's about as risk-free as money storage gets. You want better returns? Go with something that carries more risk.

The saddest part of bank interest is that on top of it lagging inflation, but also gets taxed aggressively making it effectively lag by inflation by an even wider margin! Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise. I just hate debt personally, part of my upbringing. But I wonder if there's some reit or low fee investment vehicle that makes it easy to take advantage of this dynamic while still being able to sleep at night. Any ideas?

Other than a 30-year fixed mortgage?

Yes, the dynamics of a 30 years mortgage are what I'm looking for, but turn-key. Because purchasing a property and getting a mortgage is a huge hassle up front and requires tons of work for many years. Compare this to buying a publicly traded security which requires the click of a button to purchase, and retrieving the tax slip each year.

> Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise.

With mortgages at over 6% and personal loans at 8-9% (according to my local credit union) I'm not sure if it's that much better and if deductions would offset high interest rates, but it's definitely a nice kickback.

Mortgage debt shouldn't prevent you from sleeping at night. You can live inside your investment, and the purchasing power of the money you borrowed just decreases over time. The way you go astray is to take on too much debt (everyone buys way too much house) or to choose exotic loan products that sound cheap today, but aren't. (2008 seemed to kill most of those off.)

As with anything, approach it rationally. Is there a home you want to buy, and can you put 20% down today, and can you afford the monthly payments + property taxes + insurance + random repairs that you'll have to make? If so, it's not a bad investment; after all, you have to live somewhere. As with any investment, there is some risk. Your neighborhood could become bad. The entire house could be supported only by dead termites. But most of the time, the horror scenarios you read about don't happen; you enjoy living there, and sell it some years down the road for well more than you paid into the loan. It's worth considering over pure investment vehicles; you can't live in an ETF, and there are no tax breaks.

Just buy shares in a reit.

https://seekingalpha.com/news/3956715-reits-fall-this-week-e... (Apr. 15, 2023)

Be careful investing on things/markets you don't fully understand.

It is, but the context is that most other savings account in the country have been giving less than 1% for years now, which is unconscionably low.

Capital One is currently 3.5% and Barclays US is 3.8%

So, this is significantly better.

It's 0.35% to 0.65% better, until those rates inevitably change.

That's because interest rates have been historically low for a generation. Now they are climbing, so yields are rising. Nothing conscionable or unconscionable about it.

Inflation rates were unconscionably low. The comments seem to think Apple is doing something revolutionary here. I'm making 4% on my savings accounts now, too. Nothing special here.

Is inflation the goal here, or is it comparison to other HYSAs? If no HYSAs match inflation, it's not really reasonable to compare this one to it, no?

> it's not really reasonable to compare this one to it, no?

Are the fees, minimums, limits and rate structures similar? If so, then the inflation thing is irrelevant. They either beat it or don't, but at the end of the day, you're still comparing who has the better APY and what not regardless of that differential on inflation.

If HYSA's (which this is, by reasonable metrics and their own definition) beating Inflation is important to you, that's a separate discussion to be had first before shopping specific offerings, as that's a discussion of a systemic problem and if HYSA's are relevant to you at all in the first place. Hot tip, in high inflationary markets like today, HYSA's don't beat inflation.

Several other financial institutions offer similar or higher yields with higher FDIC insured limits (eg Betterment's cash reserve), with the additional advantage that the account isn't locked to a particular hardware vendor.

You don't know what the inflation rate will be over the next 12 months. You do know what your savings account yield will be (well, until it changes). There's I bonds and TIPS if you want a hedge against inflation.

There's an interesting YC co addressing the interest rate difference between banking + investment accounts. They basically add checking account functionality on top of auto-investing:

https://nexushq.com

I have no financial interests in them, but I'm a happy customer. I like using it to make float on cash in between tax payments and other obligations.

But that's for last year's inflation.

This year's inflation might be below 4.15% (not sure what the projections are)

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