When I went to deposit a check yesterday, the screen on the ATM machine flashed, "Special 1% Interest Rate on CDs of $25,000 or More!"
I thought, my God, banks don't pay interest anymore!
So, yep. You pay them, or at least on big money deposits at Mellon Bank. See New York Post, "BoNY: Big deposits will cost you a pretty penny."
I thought, my God, banks don't pay interest anymore!
So, yep. You pay them, or at least on big money deposits at Mellon Bank. See New York Post, "BoNY: Big deposits will cost you a pretty penny."
You can keep your stinkin' money.Also at New York Times, "Nervous Investors Chase Low-Risk Assets."
The financial markets are so foul that Bank of New York Mellon -- overwhelmed by a flood of investors pulling their money out of stocks and stashing it in bank accounts -- is going to start charging its largest institutional customers for holding their cash deposits.
The nation's largest custodial bank announced that it would charge customers more than a tenth of a percentage point for "extraordinarily high" deposits of $50 million or more.
The unusual move by the bank, which manages more than $1.1 trillion in assets for investment funds and money managers looking to safely park their dough, is hoping to discourage customers from plowing even more money into their accounts.
In a sign of just how much cash had poured into commercial bank accounts, Bank of New York Mellon said on Thursday that it would charge institutional clients with more than $50 million on deposit a fee of 13 basis points. The move is intended to recover some of the cost of managing the money, but is also a bid to slow the so-called hot money that has been ricocheting between Treasuries, money-market funds and pure cash balances at the big banks.The good news is that investors are pouring their money into U.S. banks. We're lucky that way. When we've seen financial crises in Mexico and Thailand in recent decades, the money flowed out of those countries, leaving them dry and needing bailouts from the U.S. There's a reason we need to worry about our debt overhang. We don't want go the way of Mexico!
The Bank of New York Mellon said the fee would only be applied “to a small number of institutional clients with extraordinarily high deposit levels where the deposits have increased significantly in recent weeks, well above market trends.” The bank did not disclose just how much cash had poured into its coffers recently.
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