moomoo 6.8% p.a. savings rate

[jaetii]

@ericakuhl89 Youre right mate. No risk no reward~

 

[romasliv]

@ericakuhl89 It's protected by some other scheme and regulated by ASIC.

 

[ericakuhl89]

@romasliv No other scheme has the backing of any Australian government

All companies in Australia are regulated by ASIC - doesn't stop them from collapsing every day (because that is not ASIC's job)

 

[romasliv]

@ericakuhl89 "Your funds safety is our priority
Your funds are held in designated client money trust accounts held with CBA and HSBC and are fully segregated from moomoo's own funds." Wouldn't these funds be backed?

 

[ericakuhl89]

@romasliv Not by the Government's Financial Claims Scheme (which would only cover $250,000 of moomoo's funds in the event that CBA or HSBC collapsed - not moomoo.)

Also, moomoo's customers do not know the nature of the trust that owns the CBA and HSBC accounts - the trust may not prevent any liquidators of moomoo from seizing those funds.

I'm not saying moomoo will fail - I'm just saying that it is more risky to invest money with them than with Australian banks which is why moomoo is offerring a more attractive interest rate than banks. It is always true that the higher the return (interest rate), then the more risk the investment is.

 

[romasliv]

@ericakuhl89 Yeah I see. Still less risk than actually invested the money in stocks though. Also should note Moomoo does not have a PayID to withdraw out, only for deposits into the platform, so you need to pre-budget effectively as it takes 1-3 business days for BSB transfer sro go through.

On a positive note that would help a lot of people save as well and make them think two or three times if they really need to buy certain products or services provided they also have a low limit or no credit card. Inna way it's like acting as a very short term deposit.

 

[ericakuhl89]

@romasliv If you invest in multiple companies, then your investment is less risky than when you invest it in one company as it is unlikely that multiple companies would all fail at the same time.

 

[romasliv]

@ericakuhl89 Government has vested interests in protecting their banks lol. But the return isn't as great.

 

[ericakuhl89]

@romasliv Australians have vested interests in protecting their savings held by banks lol!

The return is higher with companies like moomoo because the risk of losing your money is higher

 

[testcorp]

@jaetii Earning 6% tax free in redraw.

 

[jaetii]

@testcorp Redraw? wdym?

 

[andrewmg]

@jaetii Extra repayments on home loan (in redraw - the loan account - or in offset account) saves interest over the life of the loan.

 

[testcorp]

@jaetii Mortgage redraw. Saved interest is tax free, earned interest is taxable so it needs to be 8%+ to compete after tax.

 

[resjudicata]

@jaetii If they go bankrupt, none of your money will be returned to you.

Is an extra 2% worth potentially losing all of your money?