It's like this: Most banks will offer you better interest rates for larger deposits. But poor students like me don't have much money. So, why don't I get together with some other students, pool our savings to get a good interest rate, and share the interest according to what we put in? It's like a mini mutual fund!
Posted by BandoCommando (Member # 7746) on :
And then the inevitable betrayal...
Other than that, brilliant!
Posted by AutumnWind (Member # 9124) on :
That has disaster written all over it! Good intentions (I am also a poor student),but who would you trust enough to let them have full access to your money.
Posted by BlackBlade (Member # 8376) on :
Its a good idea, but you'd have to create some sort of security measure.
Like a fund arbiter, or a limitation protocol where a person could only withdraw as much money as they had deposited.
I'd be willing to pool my money with you KOM.
Posted by ricree101 (Member # 7749) on :
Would the higher interest rate make up for the additional overhead needed to manage something like this?
Posted by BlackBlade (Member # 8376) on :
quote:Originally posted by ricree101: Would the higher interest rate make up for the additional overhead needed to manage something like this?
I would think there is a threshold yes, once you got past it it would be a higher interest rate with more or less the same measures organizing it.
Posted by King of Men (Member # 6684) on :
I was thinking that the money would be put in a CD, preferably with no withdrawals at all for some set period, but anyway with only one person allowed to make withdrawals, or perhaps you could require two signatures. Then everybody would sign a contract saying "I put in X and am owed Y at the end of time Z".
The overhead might be a problem, true, but if you had a one-year CD, for example, you could ignore it most of that year. There's only any work at the beginning and end. And most of that work would be on the Internet anyway, where I spend way too much time as it is. Posted by erosomniac (Member # 6834) on :
What sort of rate are you hoping to get that wouldn't be outclassed by most online savings accounts these days?
Posted by King of Men (Member # 6684) on :
Hmm. Well, looking at what my own bank offers, it seems it's not so dependent on the amount you put in as all that. Oh well.
Posted by Lyrhawn (Member # 7039) on :
That's what I was thinking. I get 5.05% from my HSBC online account, which is more than twice what I get from my local credit union.
Posted by BlackBlade (Member # 8376) on :
quote:Originally posted by Lyrhawn: That's what I was thinking. I get 5.05% from my HSBC online account, which is more than twice what I get from my local credit union.
I really want to make the switch to HSBC online. My stupid credit union offers a pitiful 1% interest.
Posted by Farmgirl (Member # 5567) on :
Okay, KOM -- let's say you do this, and you put in $5,000 and I put in $1,000 and we find an interest rate of 5% (just for the sake of argument.) So are you going to take the time, then, to figure which part of the interest is yours and which is mine?
Sounds like a lot of work.
Posted by King of Men (Member # 6684) on :
Eh? You get one-sixth of the interest, having put in one-sixth of the principal. Posted by Lyrhawn (Member # 7039) on :
Is it really that hard? You take whatever the interest is and you get one sixth, he gets five sixths. The problem isn't the math, it's that it'd take a lot of work to figure out how to get all those people to reliably contribute with safeguards against foul play.
Especially when going it alone at an online savings account would eliminate all of those problems.
BB -
I find HSBC very easy to work with. The account is double password protected, the transfers from my local bank to them (and back again) typically take anywhere from three days to a week, and I can do it all from my computer, and it updates you of any changes or problems by email. My local credit union just upgraded from 1.3% to 2.1% interest, but HSBC still has them beat by more than a factor of two, so they get my savings. I was nervous about storing all my money online, and I think if I ever achieved large sums of money, I'd probably find a brick and mortar building to take it too if I could find comparable or better savings, the idea of all my money being there in just blips and digits with no actual bank to run to if something drastic happens is unnerving, but just to store my savings and my emergency car fund and such, it's perfect.
Posted by MightyCow (Member # 9253) on :
quote:Originally posted by Lyrhawn: [QBI was nervous about storing all my money online, and I think if I ever achieved large sums of money, I'd probably find a brick and mortar building to take it too if I could find comparable or better savings, the idea of all my money being there in just blips and digits with no actual bank to run to if something drastic happens is unnerving, but just to store my savings and my emergency car fund and such, it's perfect. [/QB]
Brick and mortar banks just store all your money in blips and digits too. The local branch location is a false sense of security. HSBC is insured just like any other bank. Besides, HSBC does have real world locations - just not in every town.
I've had far more problems with local-branch banks over the years than I've ever had with HSBC.
Posted by MightyCow (Member # 9253) on :
If you can find friends who aren't too risk averse, you can start an investment club. Everyone puts in $x/month, and it's all invested in the stock market. These seem to be the latest rage - all the retired old ladies are joining up.
It's not a bad idea though, if you've got one or more people who know about investing. You tend to get much better returns than savings or CDs (with more risk, of course) and by pooling money, you save on brokerage fees and have more options available.
Posted by Lyrhawn (Member # 7039) on :
quote:Originally posted by MightyCow:
quote:Originally posted by Lyrhawn: [QBI was nervous about storing all my money online, and I think if I ever achieved large sums of money, I'd probably find a brick and mortar building to take it too if I could find comparable or better savings, the idea of all my money being there in just blips and digits with no actual bank to run to if something drastic happens is unnerving, but just to store my savings and my emergency car fund and such, it's perfect.
Brick and mortar banks just store all your money in blips and digits too. The local branch location is a false sense of security. HSBC is insured just like any other bank. Besides, HSBC does have real world locations - just not in every town.
I've had far more problems with local-branch banks over the years than I've ever had with HSBC. [/QB]
True, true. Maybe I'm just old fashioned and distrustful of this newly integrated financial world of ours.
So long as they continue to pay out a higher interest rate and retain FDIC backing, I'll probably keep my money with them. It's just jarring.
Posted by MightyCow (Member # 9253) on :
I admit, I was hesitant too. It's worrisome to have all your money tied up in an "imaginary" bank. After I considered it for a while though, I realized that the fantastic interest rate makes it silly not to put your money there. I already log in to my brick and mortar bank online, so I'm already taking any risks, I may as well get the rewards too.
To the best of my knowledge, HSBC doesn't require any minimum deposit. It pays better interest than a lot of CDs, and your money isn't tied up.
Posted by AutumnWind (Member # 9124) on :
Out of curiosity, if you don't have much money, isn't there a chance that you would need to access what you do have in case of an emergency, or for bills etc. By tying it up in a CD you lose your access to it. Now,if you join with others and have to access the money, then they lose the interest and have to deal with the penalty. I do agree with the online savings account. I have ING and I've been pretty pleased with the rate (that they keep raising).
Posted by Farmgirl (Member # 5567) on :
quote: Is it really that hard? You take whatever the interest is and you get one sixth, he gets five sixths.
I wasn't really saying it would be HARD -- I was saying if you have a bunch of friends, this could get time-consuming and a pain in the butt to administrate. Or will they pay you a fee to manage the fund?
Posted by rivka (Member # 4859) on :
quote:Originally posted by AutumnWind: I do agree with the online savings account. I have ING and I've been pretty pleased with the rate (that they keep raising).
Ditto!
Posted by pooka (Member # 5003) on :
This thread title just has "Adjacent thread titles" fodder written all over it.
Posted by King of Men (Member # 6684) on :
quote:Originally posted by Farmgirl:
quote: Is it really that hard? You take whatever the interest is and you get one sixth, he gets five sixths.
I wasn't really saying it would be HARD -- I was saying if you have a bunch of friends, this could get time-consuming and a pain in the butt to administrate. Or will they pay you a fee to manage the fund?
I was thinking of just inserting money exactly once, all at the same time, and extracting it once. That way you only have to do math once.
Posted by BlueWizard (Member # 9389) on :
First, where are you located? I ask because you are using HSBC bank which is a British bank. Are you in the USA or Britain, or some other part of the world?
Next if HSBC has 5% savings accounts, they must have even better CD's.
Also, you do have immediate access to money in a CD, you simply pay 'substantial penalty for early withdrawal' and you forfeit the all or part of the interest on the part you withdraw.
More importantly, if you have a high interest CD, it is probably for a limited amount of time; say 5% for 1 year. At the end of one year, the 'special' rate automatically drops back to the standard rate. I found this out the hard way. I had money in a 4.5% CD, and just let it ride after expiration because I thought the interest rate would continue. Only later did I find out my money had been sitting for a couple of years at 1.25%.
Further, I'm assuming that you can get HSBC on-line checking accounts too. So, to access your money, you simply transfer it from HSBC Savings to HSBC Checking, and withdraw or pay for what you need with your HSBC Debit Card.
I've been trying to figure the best way to transfer money easily and cheaply between a USA account and a British Bank account. I thought I would open a USA HSBC account, and simply transfer money to that on the assumption that the HSBC account could easily be accessed from HSBC Britian.
As to the central thought, why not just have everyone open their own HSBC account?
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