"a bird in the hand is worth two in the bush," right?WRONG.
You'd think banks would WELCOME your deposits. But according to the latest news about Bank of New York Mellon, that's not always the case. Okay, it's deposits of PHENOMENAL SIZE but this will 'filter down to common practise' surely.
According to the article, your deposit is like a loaded dirty pistol being thrust in their mouth, a terrorist threat they can ill afford. Reason, potential bank run.
Normally, banks pay interest to customers for deposits. But with short-term interest rates near zero, and increased FDIC insurance premiums on deposits, it hurts banks when they hold large amounts of cash on their balance sheets. Deposits are considered a liability because they can be withdrawn at any time. When liabilities go up, banks pay more for FDIC deposit insurance.[source YAHOO NEWS]
That's why 'savers' get those annoying phone calls from banks all the time, "Can we look at ways to make your money work for you?" They need to shift you out of your 'volatile' current accounts into something less risky.
Paying banks to hold your money, what a crime?
Erm, hate to burst your bubble but that already happens - the bank plays with your money in the global Monopoly(R) casino then pay you back a pittance fee for the 'crime' called 'interest', currently 0.5% in the UK for the last 18 months.
