Are You Still Earning Nothing on Your Cash?

Inertia is a powerful force – and if you’re like most Americans – you’re still earning almost nothing on your cash because if it.

According to, the national average yield on savings and money market accounts are currently 0.09% and 0.15% respectively. Many of the largest banks (Bank of America, Chase, Citibank, HSBC, and Wells Fargo) are offering even less: 0.01%.


What is the top savings rate offered today with FDIC Insurance? For the first time since 2008, it’s over 2%…


For your cash in investment accounts, Prime Money Market Mutual Funds are fast approaching 2% as well…


Why are yields moving higher? The Federal Reserve controls short-term interest rates, and at long last they are moving toward a more normal monetary policy. Since December 2015 they have hiked interest rates by 0.25% on 6 separate occasions and are expected to hike rates at least 2 more times before the end of this year.

So why would anyone still accept 0.01% when they could be earning 2.01%? Inertia. An object at rest stays at rest until acted on by an external force.

When the Federal Reserve held short-term interest rates near 0% during the 7 years of famine (December 2008 – December 2015), savers rested, likely assuming they would never earn a higher yield on their money again. But the times they are finally a changin’.

In the world of risky investing where outcomes are uncertain, earning 2% more on your money would typically require taking on more risk without any guarantee of a higher return. In the world of FDIC-insured savings (up to $250,000 per depositor. per bank, per account type), the opposite is true. If you’re currently earning 0.01% you can bump that up to 2.01% without any additional risk.

So what are you waiting for? Get moving.


Related Posts:

When Cash is King

Is Cash No Longer Trash?



Charlie Bilello is the Director of Research at Pension Partners, LLC, an investment advisor that manages mutual funds and separate accounts. He is the co-author of four award-winning research papers on market anomalies and investing. Charlie is responsible for strategy development, investment research and communicating the firm’s investment themes and portfolio positioning to clients. Prior to joining Pension Partners, he was the Managing Member of Momentum Global Advisors and previously held positions as a Credit, Equity and Hedge Fund Analyst at billion dollar alternative investment firms.

Charlie holds a J.D. and M.B.A. in Finance and Accounting from Fordham University and a B.A. in Economics from Binghamton University. He is a Chartered Market Technician (CMT) and also holds the Certified Public Accountant (CPA) certificate.

In 2017, Charlie was named the StockTwits Person of the Year. He has been named by Business Insider and MarketWatch as one of the top people to follow on Twitter and his work has been featured in Barron’s, Bloomberg, and the Wall Street Journal.

You can follow Charlie on twitter here.


Pension Partners, LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. For more information about Pension Partners please visit: and search for our firm name.

The information herein was obtained from various sources. Pension Partners does not guarantee the accuracy or completeness of such information provided by third parties. The information given is as of the date indicated and believed to be reliable. Pension Partners assumes no obligation to update this information, or to advise on further developments relating to it.

Past performance is not indicative nor a guarantee of future results.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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