Hi HN, we’re JJ and Mark, the founders of Double (https://double.finance). Double lets you invest in 50+ broad stock market indexes with 0% expense ratios. We handle all the management, including rebalancing and tax-loss harvesting—proactively...
Our goal is to bring the low fee trend pioneered by Robinhood to ETFs and mutual funds. We posted a Show HN about 3 months ago (https://news.ycombinator.com/item?id=41246686) and since then have crossed $10M in AUM (Assets Under Management) [1].
Here’s a demo video: https://www.loom.com/share/10c9150ce4114f278e8c249f211e7ec8. Please note that none of this content should be treated as financial advice.
Everyone knows that fees eat into your investing returns. Financial advisors generally charge 1% of AUM per year, and ETFs have a weighted average expense ratio of about 0.17%, although some go as low as 0.03% for VOO. Over a 30-year period on a $500k portfolio with $2k invested monthly, the money lost to those fees would be $1.30M for the financial advisor and $244k for the average ETF and even $42,951 for the low fee VOO.
Double lets you index invest without paying any percentage-based fees - we charge just $1/month. It works by buying the individual stocks that make up popular indexes. By buying the individual positions, we can also customize and tax-loss harvest your account, something ETFs or Mutual Funds cannot do.
Most ETFs and mutual funds today are not that complicated - they can be expressed as a CSV file with 2 columns - a ticker and a share number. You can find these holding csv files on most ETF pages (VOO[2], QQQ[3]). Right now there are about $9.1T of assets in ETFs[4] and $20T in Mutual Funds[5] in the US, with estimated revenue of $100B per year. We think this market is ripe for disruption.
We offer 50+ strategies that track popular ETFs and are updated as stocks merge and indexes change. You can customize these by weighting sectors or stocks differently, or even build your own indexes from scratch using our stock/etf screening tools. Once you've chosen your strategy, simply set your target weights and deposit funds (we also support transferring existing stocks). Our engine then checks your portfolio daily for potential trades, optimizes for tax-loss harvesting, portfolio tracking, and redeploys any generated cash.
I (JJ) started working on this after selling my last company. After using nearly every brokerage product out there and working with a financial advisor, I noticed a huge gap between the indexing capabilities of financial advisors and what individual investors could access. We wanted to bridge that gap and provide these powerful tools to everyone in a simple, low-cost way.
There are a number of robo-advisor products out there, but none that we know of offer direct indexing without expense ratios or AUM fees. One similar product is M1 Finance, but Double is more powerful. We offer tax-loss harvesting, a wider range of indexes, and greater customization. For example, when building your own index, you can set weights down to 0.1% (compared to M1's 1%) and even weight by market cap.
We also compete with robo-advisors like Wealthfront, but offer more control over your investments. And did I mention we don't charge AUM fees? You can see our strategies and play with the research page https://double.finance/p/explore without creating an account.
Over the past year we’ve learned a lot about the guts of building portfolio software. For example, stocks don’t really have persistent identifiers that are easy to model and pass around. We trade CUSIPs with our custodian Apex*, but these change all the time for stock splits or re-org’s that you would not think would lead to a new “stock”.
We’ve also learned a lot about how tax loss harvesting (TLH) is best implemented on large direct index portfolios using a factor model as opposed to pairs based replacements which I initially thought might be the way to execute these. We do use a pairs strategy on smaller sized strategies. And how TLH and portfolio optimization generally is best expressed as a linear optimization problem with competing objectives (tracking vs. tax alpha vs. trading costs for example).
If you have any thoughts on the product or our positioning as the low fee alternative I’d love to hear it. I think Robinhood has proved that you can build a strong business by getting rid of an industry wide cost (in their case commissions, in our expense ratios). We aim to do the same.
[1] https://www.axios.com/pro/fintech-deals/2024/12/10/direct-in... [2] https://investor.vanguard.com/investment-products/etfs/profi... [3] https://www.invesco.com/qqq-etf/en/about.html [4] https://fred.stlouisfed.org/series/BOGZ1LM564090005Q [5] https://fred.stlouisfed.org/series/BOGZ1LM654090000Q
* Edit to add a note on risk: If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. See more at https://news.ycombinator.com/item?id=42379135 below.
Comments
By fairestvalue 2024-12-1023:288 reply Ummm, have y'all thought about spread costs?
If you look at the spread of any of these ETF's mentioned (spread = ask px - bid px), you will notice that the spread is much smaller than if you were to sum up the spreads of each component stock.
That's possible because of a mature ecosystem of ETF market makers and arbitrageurs (like Jane Street).
If you buy all of the stocks individually, as it sounds like y'all's solution does, you will pay the spread cost for every. single. stock. The magnitude of these costs are not huge, but if we're comparing them against VOO's 17 bps/yr expense ratio, it's worth quantifying them.
I imagine eventually you can hope that market makers will be able to quote a tight spread on whatever the basket of stocks a client wants, but in the meantime, users would be bleeding money to these costs.
(Source: I work in market making and think about spreads more than I would like to admit.)
Also former HFT / market maker here (UBS, GETCO), and also the developer who wrote Wealthfront's direct indexing with tax loss harvesting 10 years ago.
I had that same skepticism before I built it. Using a Bloomberg terminal back then, my conclusion was that the weighted spread for the S&P 500 was 3.2 bps, vs. 0.6 bps for SPY.And this was > 10 years ago, so I'd think by now it would be even tigher. The ratio may have changed, but who cares? It's like saying that rice got more expensive at the supermarket - it's already so cheap that it doesn't matter.
With tax loss harvesting specifically, each order typically has a threshold, so that you only trade when the projected tax benefit is a large multiple of the transaction cost.
Also, I'm sure this is obvious to you if you work in market making, but for others reading this: the spread costs aren't additive (re: 'every. single. stock'). If you have 500 stocks, each with 2 bps round-trip spread cost, but each is at e.g. 1 / 500 = 20 bps, then the weighted spread for the entire basket is 2 * 500 * 1 / 500 = 2 bps. It's not 2 * 500 = 1000 bps. The main question then is - how much tighter are spreads for ETFs than for the average stock? And, since bigger stocks (AAPL, NVDA etc.) will have tighter spreads than smaller index constituents, the weighted average will be even lower.
Here's my blog post:
https://eng.wealthfront.com/2014/03/04/marketside-chats-4-co...
By ikourtid 2024-12-1318:36 Follow-up to my (most upvoted, it seems) post.
ETF expense ratios are only the headline cost. There's also a hidden cost you never see.
An index (and, therefore, any fund that tracks it) has a methodology that results in additions/deletions/index changes being announced to the market ahead of time. Usually that's quarterly, but also sometimes annually.
For an index addition announcement, you can imagine that the price will go up beforehand, since market participants (all except the actual ETF) will buy the stock in anticipation of the extra demand of that stock being in a widely held index. [This is actually more complex, and doesn't always work in that direction, but that's beyond the scope of this comment].
Now, the ETF doesn't care about this. They get graded on how closely they track the index. So they will buy the index addition on the closing auction of the day of the index reconstitution. Sure, they'll get a worse price (on average) than if they had bought 2 weeks ago, but who cares? They don't, and their clients don't (partly because they don't know).
This effect is even more pronounced in certain indexes where this dislocation would be larger, e.g. those with more turnover, infrequent rebalances, etc.
Just drop "what is the drag on returns due to index reconstitution in the Russell 1000 index?" in ChatGPT. Admittedly that's one of the worst offenders, and this is not scientific, but ChatGPT says 0.2% to 0.3% annually. That's already more than the 0.17% average mentioned in the original posting.
[Source: I worked on the trading floor in the program trading desk of a bulge bracket bank that actively traded these index reconstitutions.]
By jjmaxwell4 2024-12-112:411 reply Yes we've thought about them a fair bit.
We believe that in most ETFs right now the transaction costs are largely factored into either the expense ratio or the ETF bid-ask spread, exactly due to the redemption mechanism you discussed. See section titled Spread of the Underlying Securities in an ETF Basket in the following PDF and the following quote:
"If a market maker has to obtain a portion of the ETF constituents on the secondary market to then deliver into the fund as part of the basket process, the cost of acquiring those names should be reflected in the ETFs bid/ask spread — as costs are traditionally passed through to the end customer."
https://www.ssga.com/library-content/pdfs/etf/au/spdr-au-etf...
Also we take estimated spread costs into account when running our portfolio optimization. A higher bid-ask spread as measured by past 1 month NBBO p50 spread generally gets penalized in our portfolio optimization all else being equal, although this depends slightly on what optimization setting you've chosen on Double.
By fairestvalue 2024-12-113:16 Except, in practice (not "traditionally"), the cost of a sophisticated market maker to acquire these constituents is usually much less than if you or I were to trade on the market in our brokerage account. SPY's spread is only 2 pennies wide (3 bps), for example.
By westurner 2024-12-1114:25 I just found this while researching for my other comment in this thread; re: "Fund of Funds Investment Agreements",
Would Rule 12d1-4 (2020) apply to holding funds versus holding individual stocks and/or ETFs? What about the 75-5-10 rule for mutual funds?
From https://www.klgates.com/SEC-Adopts-New-Rule-12d1-4-Overhauli... :
> Rule 12d1-4 will prohibit an acquiring fund and its “advisory group” from controlling, individually or in the aggregate, an acquired fund, except for an acquiring fund: (1) in the same fund group as the acquired fund; or (2) with a sub-adviser that also acts as adviser to the acquired fund. [4] Rule 12d1-4 requires an acquiring fund to aggregate its investment in an acquired fund with the investment of the acquiring fund’s advisory group to assess control
By i-cjw 2024-12-125:35 Surprised to see so many current and ex HFT/MM folks in the comments yet no mention of the fact that you don't have to cross spread to get filled. If you're lifting the far touch 100% of the time then, sure, you're going to pay the full spread - but no-one with half a brain cell does that. Unless you really think you have intraday alpha in the name (and in this case they most certainly do not) then you'll camp out on the near side or down the book and cross much less than half the time. Add into that the liquidity rebates and life just got a whole lot cheaper.
Wouldn't fees generally be more significant if holding over a significant time period? Like VOO's 17 bps would mean ~2% over 30 years. Not sure what the weighted average spread of broad index funds looks like, but I would have thought it's far lower.
I guess rebalancing also creates an ongoing spread-based cost, but it seems like that should be far more minor, at least for broad index funds with low-single-digit turnover.
By darkerside 2024-12-1112:041 reply There's also time value of money. Paying upfront like this means that money can't be invested (by you), and you lose out on the money plus the return.
By dlubarov 2024-12-1118:05 Wouldn't that be for fixed-dollar fees? I think here all the costs we're talking about are percentages.
I.e. ignoring taxes, the amount I theoretically expect to exit with should look like
Where return_rate might look like ~1.1, fee_rate might look like 0.9983 (17 bps), and entry_cost and exit_cost might look like half_spread/price (under some assumptions...).entry_cost * (return_rate * fee_rate)^T * exit_costSo I think this comes down to whether T is large enough for that exponentiation to dominate the half-spreads.
By igor47 2024-12-1218:17 It's an incasualator. It causes the response to read as more casual/conversational, and less pedantic. But I guess you wouldn't know anything about that ;-P
Can someone honestly explain the downvotes for agreeing with a commenter that I’d like to understand how they handle the spread issue?
Likely due to the guidelines[1]
> Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
your comment didn't add anything of value to the thread. Upvoting will cause the thread to float higher in the overall discussion and increase the visibility (and thus chance of a response).
Just as a note - your reply comment and even this comment itself is also against guidelines due to being a comment on the comment system and off-topic for the article - but I wanted to make sure you were familiar with the system.
By ada1981 2024-12-131:59 I appreciate that.
The parent had skipped over responding and I wanted to voice that I too would be curious to know the answer.
Are you saying the best and only option is upvoting?
By JoshTriplett 2024-12-113:462 reply You're coming into a market where most providers make much more money, and you're undercutting and selling for $1/month. $1/month is below even most cheap B2C services, and many customers are likely to want a product like this to manage a large number of assets.
With what other product, service, arbitrage, float, or other mechanism do you intend to make more substantial amounts of money? Knowing what this is would help potential users trust you more. "Ah, that model makes sense" is a more comfortable reaction than "I'm skeptical that this will continue to exist as a going concern that meets anyone's expectations".
I'd also like to know that! I have some ideas, from less shady to more:
- Payment for order flow
- Interest on sweep accounts
- Upsell to more profitable products (first party ads)
- Payment for order flow, but structure your orders so the spread is really attractive to market makers (unfortunately you might be doing this unintentionally)
- Third party ads
- Sell your customers' data
There's also the possibility of not doing any of these, losing money in the name of customer acquisition, then selling to someone who will monetize it better.
I find it a bit rude to ask a company their exact business plan, even on Launch HN, but maybe I could ask - are there any of these monetization strategies you disdain and would specifically rule out? And if you do have one or more of these in mind, is the $1 really important, or is that a marketing trick where people wouldn't trust you if it was free?
By fisherjeff 2024-12-1115:041 reply I’d think some combination of all of the above, but would love to know how valuable the order flow is from an indexer – it’s gotta be worth way less than from, e.g., Robinhood right?
By dmurray 2024-12-1121:29 I'm not sure that's true.
The market-wide spread for SPY is smaller than the implied spread from all the 500+ components. If you request your market maker for individual prices on the components (or 470 of the components plus 30 stocks substituted for tax loss harvesting purposes), they have an obligation under NMS to quote at least as tight as the individual components, but that could still be wider than they would on the index.
If you have a perfectly competitive market, you can go to all the market makers, and their spread will approach what they would have quoted on SPY. But if it's not perfectly competitive, and you ask your preferred market maker to quote a wider price and split the difference (via a cash payment to you) versus what she would have quoted on SPY, you can both make a few pennies for every share traded.
By vpribish 2024-12-1218:30 Also collect and keep the stock lending fees
By didibus 2024-12-1121:52 My first thought as well. I feel there's a catch I'm not seeing, someone tells me I'm going to get ETF returns for only 12$ a year, no year over year percentage cost of any of it? Seems like this can only work up to a point where their subsidized investment last.
So I need to know how do they plan to sustain that, and will it come at my expense?
By hn_throwaway_99 2024-12-1014:429 reply I saw the "Your Money is Secure" section, but after things like the Synapse fiasco, I would like to get confirmation from you.
It says my money would be SIPC insured, which means if anything goes missing (obviously not through loss of equity value, but through missing funds or a ledger bug), I get my money back, up to the SIPC limit, right? I just want to ensure this isn't the same situation with fintechs that say your money is "FDIC insured", but that only protects you if the bank fails, not if the fintech goes bankrupt.
I'm just really, really wary of new fintech products to save like .3% on fees when I hear all these horror stories of people trusting fintech startups with their money any then losing 95% of their deposits like the Yotta customers.
By jjmaxwell4 2024-12-1017:424 reply If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets.
SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.
By hn_throwaway_99 2024-12-1020:171 reply > SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.
I thank you for being upfront and honest about this. The tough spot you'll find yourself in, then, is that if any money goes missing between you and Apex, customers are completely SOL. This is not a theoretical risk, this is exactly what happened in the Yotta/Synapse fiasco. Even if I trust that you guys are much better technologists than Synapse, would I be willing to take that risk for a teeny, teeny reduction in fees compared to an index ETF? Sorry, not for me.
EDIT: Wanted to put an edit up here so that it doesn't get lost. Thanks for your response below - for me, that was the critical information I needed, that I can directly verify that my SIPC-insured funds are held by the SIPC-insured entity. That was indeed not the case with Yotta/Synapse (and, indeed, most fintechs who keep customer funds in an FBO account at a partner bank), so I really appreciate the clarification. FWIW, I think it might be worth it to add a small blurb in the "SIPC Insured" section saying that your insured funds can be verified at any time.
Kudos, you guys have thought through a good deal of the important details, and sufficiently assuaged my concerns.
By jjmaxwell4 2024-12-1020:331 reply I'd argue the specifics are quite a bit different than Yotta/Synapse.
We do not hold any funds ourselves. You connect your bank and ach/wire money to an Apex bank account. You can verify your holdings via apex anytime (see: https://help.double.finance/en/articles/10262406-how-can-i-v...)
By yottathrow 2024-12-1021:073 reply Yotta does not hold any funds themselves. You connect your bank and ach/wire money into an Evolve bank account.
The problem is that unbeknownst to users, Evolve had no record of what belonged to which user—it all came via Synapse on behalf of Yotta. And when Synapse went bankrupt, everyone pointed fingers about where the money is and who it belongs to.
https://help.double.finance/en/articles/10262406-how-can-i-v... makes a big difference, since it sounds like Apex does have their own ledger of accounts, independent of Double.
Evolve not having their own ledge was exactly the problem.
By Terretta 2024-12-1111:48 OTOH, some users seem able to talk to Apex about their shares that had been via an "app", and are still frustrated… with Apex:
> My own personal experience with Apex - I transferred measly GME positions out of Stash app (Apex) to Fidelity in June. My Apex/Stash account is still locked from this transfer. My CS requests have been escalated to the broker (Apex) repeatedly. Finally today, Apex confirmed they will unlock my account in 4 business days. That’s 34-36 calendar days after share transfer. All this DD is much smarter than me, but even in little ways these big explanations offer a simple reason for these shenanigans. I have NEVER had my account locked for share transfer past the confirmed transfer date for any other position. They had the gall to tell me today that they needed to speak with Fidelity directly to confirm receipt and Fidelity “received” my shares 3 weeks ago, which was 3 weeks after I initiated it. Why all the runaround?
By datavirtue 2024-12-1112:26 Surprisingly common for fintechs to be ledgerless. They will always end up with one if they last long enough.
By hn_throwaway_99 2024-12-1021:19 Will reply directly to your comment, as I started the concern in this thread, and I think it's important to point out that the situation is materially different based on what jjmaxwell4 has responded.
With Evolve, money was just pooled into an "FBO" ("for benefit of") account, and not ledgered directly to individual users. This is apparently not the case with Apex since you can verify your balance with them directly. They report your balance, so if any money goes missing, you should have an insurable case with them directly.
By datavirtue 2024-12-1112:24 Yep. The bank has to require reconciliation of the accounts that are active in the FBO. Oddly enough, there is zero standardization in banking regulations and recon is an afterthought and rarely done. Doubly so if you are talking B2B.
Reconciliation costs a lot of money. They typically just watch the balance and and bark at the fintech for more money when it runs out. There are people at every bank calling partners every day demanding wires for overdrawn FBO accounts. Buyer beware.
>> If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. >> SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.
Dear @jjmaxwell4 -- I'm not really worried about your service given you're a layer atop Apex, however, this is a very common conversation happening right now on many forums -- could you clarify a bit more, how one would "get comfortable" with a new product?
I'm assuming the list is something like this, but that is an non-expert guess:
- Is the institution i'm interacting with regulated (in your case, Yes, Double is regulated by The SEC)
- Who holds my funds, and are they regulated (in your case, the funds are held by Apex Clearing, and if I understand correctly, Apex is a broker dealer regulated by The SEC)
- Are the funds held in my name or pooled in with other money? (in your case, I think the funds are held by Apex only in my name)
I think one of the problems with the Yotta/Synapse/Evolve collapse is -- its unclear how one even evaluates their level of risk.
It is also unclear how one validates SIPC coverage, like could I go to SIPC and enter an account number and validate the funds are actually covered somewhere across the layers?
Would be great for someone who knows this area to comment.
Appreciate diving into the details!
You can sign up directly with Apex (completely separate login) and view your holdings in your name in their web portal, along with all documents that Double sends you on your account activity. The process requires a bit of verification so I've written up a help article here on how to get set up: https://help.double.finance/en/articles/10262406-how-can-i-v...
By xur17 2024-12-1023:29 Just wanted to comment and say that I'm happy you / Apex offer this. My concern (similar to others in this thread) is that Double might say they are depositing the money into Apex, but it's possible they actually are not, and being able to verify this myself is crucial.
By AznHisoka 2024-12-1018:33 Ditto. I would really love to know if theres a site where you could enter the ID of a company and tell me if SPIC really backs them up..
By johnnyo 2024-12-1023:57 How are the SIPC premiums being paid?
Let’s say I invest $250k with you. From my research it appears the SIPC premiums on that amount would be more than $12/year.
How does that work?
By bboygravity 2024-12-1018:462 reply Search keywords: Apex clearing and trade 385.
They're basically criminals. A guarantee by Apex is worthless IMO.
By eagleinparadise 2024-12-1022:141 reply Alright, I did the google search based on your incendiary comment and whatever you're trying to suggest does not seem to be the case.
pg 79: https://democrats-financialservices.house.gov/uploadedfiles/...
"Apex provides these same clearing services to many other introducing brokers, including Ally Invest, Betterment Securities, M1 Finance, Marcus by Goldman Sachs & Co., SoFi Securities, Stash Capital, Tastyworks Inc., TradeZero America Inc, and hundreds more"
By voidmain0001 2024-12-110:27 There are some Reddit threads about this - https://old.reddit.com/r/Superstonk/comments/1dz57am/trade_3...
Take them with a grain of salt.
By fancyswimtime 2024-12-1022:19 we gettin a fan made doco on it, https://www.youtube.com/watch?v=opDJq1fnoRM
By bachmeier 2024-12-1015:23 > I'm just really, really wary of new fintech products to save like .3% on fees when I hear all these horror stories of people trusting fintech startups with their money any then losing 95% of their deposits like the Yotta customers.
That's immediately the scenario that comes to mind when I see any of these offerings (this one might be perfectly legit, but the reality is that I have no way to know). Then I remember George Costanza exploiting a loophole to save money by seeing a holistic healer: https://www.youtube.com/watch?v=8uVSKgMpnuo
This from the site feels reassuring: "Your funds are held in your name at Apex Clearing, one of the largest US Custodians holding over $114B in funds."
The "in your name" part is specifically what I was looking for.
By hn_throwaway_99 2024-12-1015:442 reply Yeah, FWIW I think their disclosures look good, but I want some explicit reassurance. I want to ensure "in your name" is not the same thing as "for benefit of".
The thing that actually gives me the most reassurance is that they say definitively that they are a Registered Investment Advisor. In the Synapse situation, all the regulatory agencies were essentially saying "not my problem" because Synapse itself wasn't covered under any explicit regulatory regime. That doesn't seem to be the case here, but I'd feel better if the founders said something along the lines of "This is how we're different from Synapse..."
By jjmaxwell4 2024-12-1015:502 reply The account is opened in your name and your securities are held in your name at Apex Clearing. Apex has more than 19M brokerage accounts opened.
We are Registered Investment Advisor (RIA) regulated by the SEC.
If you want to hold people's serious money and not play money, understand that priority #1 is not growth or expense ratios - it's risk mitigation. Swiss banks are notoriously expensive and have terrible investment products that hold trillions because of their obsession with protecting capital.
As a startup, you must figure out how to convince ordinary people to change their family safety net. Full transparency, audits by a known firm, and an entire brochure/mini-site explaining every significant fintech failure, showing how my money would remain safe if that scenario happened again.
> Swiss banks are notoriously expensive and have terrible investment products that hold trillions because of their obsession with protecting capital.
What? Their second largest bank, Credit Suisse, imploded only last year. They hold trillions because of their nominal neutrality (though their cooperation with western sanctions against Russians appears to be hurting this significantly) and banking secrecy laws that serve as shelter for proceeds for all sorts of crimes.
By e1g 2024-12-111:11 Typically, when referring to “Swiss banks” people in the industry refer to the likes of Pictet/Lombard/Baer. Credit Suisse was closer to Bank of America than a Swiss bank.
Nomenculture aside, depositors did not lose a single cent in that implosion, and it went smoother than the SVB one.
By tippytippytango 2024-12-1017:121 reply Fintech needs a lot more regulation if people are having to worrying about this kind of nuance to engage with the business.
By drewbitt 2024-12-1020:19 I lost thousands of dollars with Snyapse's collapse, and there's still no update on getting any money back. It is a real concern, and something many are pushing on to regulate + rule over, but so far there's no bite.
By don_neufeld 2024-12-1014:532 reply Yup.
Zero interest until there is a very clear answer here.
By arcticbull 2024-12-1018:211 reply I get like 4% at my bank. Sounds like you need a new bank! I'd suggest starting with Nerdwallet. [1]
By deathanatos 2024-12-1020:394 reply This is always the answer that gets posted. AIUI, though, the decent-interest-rate accounts are only available from online-only banks, and as recently as last year, I was required to visit a branch (…3, as it was…) in order to conduct some transactions, largely due to credit cards having a daily limit.
(I also sort of loathe the idea of needing to continually update a bunch of ACH information every year while I chase whatever bank is currently trying to draw customers with a temporarily decent rate.)
(And honestly the whole thing is kinda stupid every time I hit it. Businesses tend to give you shocked-pikachu-face when you can't use a CC due to the limit — like you've got to know these exist? And my limit is standard, as they go. And daily limits are trivially circumvented: you just spread the transaction across multiple payments spread out over time. In business, this hack^W method is called a "payment plan".)
Fidelity can get you a better rate with their treasury money market, which works for Bill pay / etc.
They have branches in most major US cities I think.
By neilv 2024-12-1022:31 https://www.fidelity.com/spend-save/fidelity-cash-management...
(Note that SPAXX was up to about 5% 7-day yield within the last few months, IIRC, but currently 4.25%.)
By camel_Snake 2024-12-1022:151 reply seconding. Recently transitioned to fidelity's cash management account and have done a cash advance on the debit card at a local, non-affiliated bank with 0 fees involved.
Checks the boxes for me, personally.
By yellottyellott 2024-12-1110:41 i do two tiers of banks. direct deposit into a chase checking account. i pay down everything from here. then i transfer what’s left (minus $500) to an ally savings/invest account. lets me use ATMs and branch services with chase while having a higher savings rate with ally. if i need to pull a wad of cash out, i generally know more than a couple days ahead of time for a transfer to clear. if i wanted i could chase savings account interest rates and move from ally to somewhere else, but what a hassle. 0.5% on 100k is $500, and not worth it to me. ally’s rates are generally fine imo for me not to worry about it.
i’ve only ever hit debit card limits when trying to buy like a car. if you’re hitting cc limits, i dunno, maybe you have more liquid cash where smaller interest rate increases are worth the squeeze.
edit: ok i totally forgot i moved the bulk of my ally savings into an ally invest account holding a vanguard money market fund bc the rate was higher. this is a little less work than opening an account with another bank at least. the rate was 5.4 and is now 4.5. ally savings account is at 3.8. cds, ibonds, money market funds, these are all vehicles i never used prior to covid but have since. chasing it all around is annoying, but i only take stock maybe every 6 months. there’s diminishing returns here since everything past the efund gets invested in an index fund anyway.
By Terretta 2024-12-1111:52 > the decent-interest-rate accounts are only available from online-only banks
One does need to look around, whether for national or local, and for instance not all local credit unions which can get close to the rate you would pay on a mortgage advertise on the web.
Open a brokerage account and buy SGOV with your cash savings. Done.
By arcticbull 2024-12-111:141 reply IBKR just pays you like 4-5% on idle cash, so do a few other brokerages. Don't even have to buy anything.
By blibble 2024-12-1023:16 at least with the bank you get your capital back
more than can be said for those that trusted another YC fintech (synapse)
By FactKnower69 2024-12-1018:362 reply >I'm just really, really wary of new fintech products to save like .3% on fees
off by an order of magnitude, you're saving 0.03% on fees
By pkkkzip 2024-12-1020:02 in the long run its negative because order flows are sold to hedge funds who ultimately trade against the masses.
I'm also not sure I would trust any fintech startup from YC after Yotta and Coinbase.
Matter of fact, I increasingly find YC rewards unscrupulous and morally cavalier founders and products that does more harm to society than good.
i find myself increasingly growing wary of YC affiliated founders not to mention the obvious CCP money involved.
By Cataleya 2024-12-1018:43 [flagged]
IIRC, FDIC only covers the deposits if the underlying bank fails, not the fintec layer built on top of it. Please correct me if I’m wrong.
By hn_throwaway_99 2024-12-1015:391 reply That's literally exactly what I wrote in my comment.
By chasebank 2024-12-1020:26 Either coffee hadn't kicked in yet or an edit on the parent? Not sure but I definitely missed it. Probably the coffee.
So how does it work now with bank fraud or technical issues? Ignore the fintech layer for a moment, just consider a bank like Chase or Wells Fargo. If their mobile app causes an erroneous transfer, or the backend removes money from your account or maybe doesn't give you the expected interest amount your saving account due to a bug ... what is the recourse? For a reputable company, even if their support is a hassle, they'll probably make you whole eventually. But presume they don't address the issue or repeatedly have widespread issues, what then? Do banking regulators step in? Does the public just need to rely on torts and threat of a suit or bad press?
By schmidtleonard 2024-12-1017:31 One time a bank tried to stop me from moving my money to a new bank. It was reasonable for security to be high, of course, but not prohibitively so. After an in-person visit and a 30 day waiting period they "rejected my request," no reason given, no response to my request for a reason given, and told me to try again in 90 days.
Someone on HN suggested getting the comptroller involved. I think I found a state office called the comptroller, but it might have been the federal one? In any case, the moment they showed up in a conference call the bank transferred me to someone important, stopped fooling around, and made the transfer happen. The person at the comptroller office never got past the asking questions stage, but the bank's behavior changed immediately in a way that suggested they recognized the smell of authority. So that's my keyword suggestion: comptroller.
By freeone3000 2024-12-1017:132 reply The consumer finance protection bureau is your best bet. Banking regulators will also get involved for patterns of conduct, but this can take years.
By JumpCrisscross 2024-12-1020:38 > consumer finance protection bureau is your best bet
Usually not. Your best bets are your state banking regulator and AG. After that, the FDIC and Fed.
By freeone3000 2024-12-1017:57 Elections have consequences.
This would explain only $10M in AUM within 3 months. Id guess just the commenters on this thread hold 10x that in etfs and funds
If a big bank launched this it would have $1B in AUM within less than an hour
By TuringNYC 2024-12-1018:21 >> If a big bank launched this it would have $1B in AUM within less than an hour
I love the M1 product (and while I am not a Double customer, I love the value proposition). Note that ShareBuilder (eventually Capital One), FolioFN have tried and didnt get traction.
Fidelity has "Fidelity Basket Portfolios" and I'm assuming they have no traction -- the product is broken 3 of 5 days of the week, and almost nothing works. I could file a dozen Jira SEV-1 bug tickets "Fidelity Basket Portfolios" is so bad.
Chase has a basket product but it is barely surfaced on their OneVest menus.
