A massive outflow of money leaving banks is causing a “bank walk”, triggered by a large gap in interest income.
- Big banks like Wells Fargo, Chase, or Bank of America offer very low APY in their savings account, most under 0.1%.
The tidal wave comes as millions of mobile banking apps that can easily access money market funds average north of 4.5% APY.
- Just last week, Apple and Goldman Sachs announced its own savings account offering 4.15% APY.
- The question becomes “why would you stay with a bank giving 0.01% when 5 minutes on a phone app could net you 450x more in interest income?”
The “bank walk” isn’t stopping until the gap closes by a lot which could take a while considering the Fed is set to widen it even more when they hike rates on May 3rd.
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