You take my cash, buy TBills at 4.8% and earn 1% risk free. I can just buy TBills myself
Nice try π
Discussion
We're not earning 1% on this product. We donβt receive the same interest rates as tradfi on large dollar balances.
Instead of buying TBills, you are just parking it in some banks?
So I have to
1. Trust you not to run away with the fiat
2. Trust your bank not to go bankrupt or seize the fiat
3. Earn less than what I can get by buying TBills myself
You need to rethink this π
T Bill rates are decreasing rapidly and likely to continue to do so. However you are correct there is a spread you can potentially capture. The possible pitfall of that strategy is you likely have to wait at least 3-5 business days in ACH transfers and if thereβs a BTC price move during that time you could miss it. But even that depends on when the TBill redeems versus when river pays our interest.
Also forgot to mention you donβt earn interest while your money is moving in ACH transfers. So if we assume 4 days(maybe low if you hit any weekends) for each transfer on a 1 month T bill: 4 days from your bank to broker, 4 days from broker back to your bank when TBill redeems, and then 4 days to River for a total of 12 days in transit. That means despite the 1 month TBill rate being around 4.6% currently, out of a 45 day period potentially 1/3 of that time you are earning no interest while your money is moving. So your effective rate on that TBill is much lower.
*this is highly dependent on your bank and broker and could be significantly different
Think ur missing the idea of convenience for most people. If the extra 1% is worth the effort for you then more power to ya tho.