I thought about this, but I wonder if it is legal given that they're not a financial institution.
Alternatively, what kind of margin would they take off? 50 basis points? 100? Interest rates are already low, so a small cut right now looks very big to consumers.
EDIT: posts above suggest BankSimple will offer better rates than industry competitors. Where are the margins, then?
Compare the margin between ING Direct savings and BofA checking. If you were to offer rates slightly above and store all your money in an ING Direct savings account, you would be able to make quite a profit.
It's conceivable that a large institutional client would get even better rates than an individual ING Direct savings account, so there is plenty of money for BankSimple to skim off the top, as long as they have enough capital.
Alternatively, what kind of margin would they take off? 50 basis points? 100? Interest rates are already low, so a small cut right now looks very big to consumers.
EDIT: posts above suggest BankSimple will offer better rates than industry competitors. Where are the margins, then?