Is your bank savings keeping up with the FED? ...Probably not

[John McKee]

It's a good time to be on the sidelines and earn some cash while continuing to shop around for your next real estate deal.  A high paying money market account is a great way to place your money.  Unfortunately a lot of legacy banks drag their heals when raising their rates on money market accounts.  If your cash is not earning at least 4% on the sidelines then it might be a good time to shop around. 

[Carlos Ptriawan]

Quote from @Ray Hage:

The FED is destroying our savings in real purchasing power but that's ok, we need to sit on the side for a bit if you are going to look for a big investments. If all your cash is tied, how are you going to take advantage of an opportunity when it presents itself?

 Actually no.

What the Fed actually do is they are making Real Rates to be the same as Inflation rate.

Inflation rate is 5% this month, they orchestrated the Bonds/Tips to return around 5% as well, so real rates are actually still 0%. 

However, when you still save your money to Bank of America and Wells Fargo, you practically giving your money to them as their rate is lower than goverment's rate while they automatically re-invest your 0 percent money to 5% gov. money.