Get 150-Times More Interest on Your Savings (Best High Interest Savings Account 2022) | Summary and Q&A

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July 30, 2021
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Let's Talk Money! with Joseph Hogue, CFA
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Get 150-Times More Interest on Your Savings (Best High Interest Savings Account 2022)

TL;DR

Interest rates on traditional bank savings accounts have plummeted, causing savers to lose money due to inflation. However, high-yield stablecoin accounts offer significantly higher interest rates, making them a viable alternative.

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Questions & Answers

Q: Why have interest rates on bank savings accounts dropped so significantly?

Interest rates on savings accounts have decreased due to central banks lowering their base rates to stimulate the economy. This encourages spending rather than saving.

Q: How much money are savers losing on average due to low savings interest rates?

The average household is losing $178 per year, as the interest rates on savings are below inflation. With consumer inflation rising to 5%, this loss could increase.

Q: What are stablecoins, and how are they used in finance?

Stablecoins are cryptocurrencies that maintain a constant value by being backed by a reserve of dollars. They are utilized in international money transfers, closing contracts, and arbtrage trading, among other financial transactions.

Q: How do high-yield stablecoin accounts offer such significantly higher interest rates?

Platforms like BlockFi earn money by lending out the crypto stored on their platform to money managers and traders. They offer a portion of that interest to users who deposit stablecoins.

Summary & Key Takeaways

  • Traditional bank savings accounts have seen interest rates drop to 0.05%, causing savers to lose money due to inflation.

  • Stablecoin accounts, which lock their value to the dollar, offer interest rates up to 100 times higher than traditional savings accounts.

  • Platforms like BlockFi allow individuals to deposit their savings as stablecoins and earn high-yield interest rates, with rates as high as 7.5%.

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