[icecap12]

There are multiple places. For sure other banks. JPM and other “too-big-to-fail” banks received billions of dollars in deposit inflows over the last few days[0].

But for me personally, I’ve been moving cash to US Treasury bonds, and based on recent bond prices, so have others. Short term treasuries were nearing a 5.1% yield as of early last week, and now are below 5% due to demand.

Last fall, I moved cash to HYSA accounts for a higher yield, because my bank was still paying 0.05% interest, presumably because they were loaded with low-yield treasuries and mortgage-backed securities.

In general, a bank is not a great place to park tons of money, at least that’s what I’ve learned. I’m tired of getting screwed by them. What the media calls “faith in the banking system” I call getting bent over. Of course there are valid uses for banks, especially in business. But I’m done parking large amounts of cash there.

[0] https://www.reuters.com/business/finance/jpmorgan-other-big-...

[gadders]

How are you holding those bonds? Are you getting physical certificates and putting them in a safe/safety deposit box? If they're held electronically in a custody account at a bank that goes bust then I'm not sure you will be much better off.

[mywittyname]

Not the OP, but I assume they are holding them in TreasuryDirect.gov.

[TacticalCoder]

> How are you holding those bonds?

Can't bonds like these just be hold in custody at the bank, like stocks? They're property title no? Should my bank in the EU go bust, AFAIK, my stocks are mine. Isn't that the case for short-term US treasuries?

As for physical certificates, didn't the entire world move to digital certificates about 20 years ago? I remember my family having those old physical certificates where you'd cut some pieces of the paper out of them and then you'd go at the bank to get your dividends. And there wasn't much security: you stole these and they were literally yours, with nobody who could verify who they belonged to. These physical "bearer" certificates have been the plot of a great many movies but I think it's now (mostly?) a thing of the past?

[HPsquared]

That's a double whammy.

If you hold a large amount of cash in a low-yielding bank account, you not only get less yield but are also exposed to the possibility of bank failure (which is itself increased by the increase in treasury yields).

[oblio]

> Short term treasuries were nearing a 5.1% yield as of early last week, and now are below 5% due to demand.

How short term are we talking about?

[pclmulqdq]

The 4 week is yielding 4.5% as of the last auction. These rates are all annualized, by the way, so you aren't getting a 4.5% bonus after a week.

[cypherpunks01]

Short term duration is generally considered 1 year or under. The Treasury sells bills for 4, 8, 13, 17, 26, and 52 weeks.

[pjc50]

Banks never were great for yield, only as a place to route all your payments through, and even that is done badly in the US system as compared to Faster Payments.

[IAmGraydon]

Good luck when Congress fails to agree on the debt ceiling issue in June, defaults on treasuries and government bonds become nearly worthless.

[ericpauley]

Most everything is eventually wrapped treasuries. If the US government defaults you have far bigger worries.

[icecap12]

The situation you've described has never happened. Out of all the options, it is considered the safest. People forget that the dollar is backed by the ultimate currency - military force.

[xeromal]

That scenario is a can of beans and hunting deer with my 30-06 kind of situation if it really gets that bad.

[grey-area]

Why go for a hard default when they can soft default (as now), and nobody cares?

Yes republicans in Congress will try to force a crisis, no it won't actually mean government bonds become worthless.

[mastax]

If you're going to hold until maturity, I don't see how the debt ceiling affects you significantly (any more than it would affect the entire asset market). The treasury will pay you eventually, likely within days.

If you are holding 10 year treasuries and were planning on selling them on the secondary market in July, yeah that could be very bad.

[cm2187]

You bank is likely more stable than your broker.