Wasting a Perfectly Good Postage Stamp
How low are interest rates today?
So low that it literally doesn’t pay to spend 44¢ on a first class stamp to mail a deposit to my broker’s local branch, vs. using their (free) self-addressed envelope and sending it out-of-town.
Time Value of Money? Infinitesimal
Once upon a time — when interest rates weren’t microscopic — it was a no-brainer to mail a larger (for me) deposit to my bank or broker’s local branch, so the money could be deposited faster (and start earning interest).
Which is what I just did earlier this week when I made a deposit to my Fidelity money market account.
Just out of curiosity, I whipped out my Excel spreadsheet to see whether I came out ahead doing that.
Assuming that depositing $5,000 locally saved three days, and that the interest rate on my Fidelity account is .05% (it may actually be less), that manuever earned me . . . . a whopping 21¢!
Bottom line: I would have been better off saving the 44¢ postage stamp!