That's a good point, but just covers the case where your bank fails. In the event of currency depreciation, your (e.g.) dollar-denominated account can lose a lot of value. Of course this may be accompanied by a crash in the same stocks they're proposing you invest in.
The risk level of my checking account becoming less valuable due to currency inflation/depreciation is minuscule compared to the risk of putting that money into the stock market.
The comment I replied to above suggested that checking accounts hold risk due to the bank making risky investments, which is fundamentally wrong for everybody operating with in the FDIC coverage limits (which is the overwhelming majority of Americans).
Your first sentence is wrong for many scenarios and is meaningless without a time interval. Over a period of 10 years the risk historically is absolutely higher from inflation than a total market mutual fund.
If people were good at sweeping excess balances into their investments I think this idea would be less appealing. But for a variety of reasons, many perfectly rational, people like having a nice cushion in there. It feels safe. Long term, it isn’t. These guys should lean into that in their marketing.
My checking account (and the checking account of the majority of Americans) isn’t measured in intervals anywhere close to 10 years.
The reason perfectly rational people like having a cushion in their checking account is that rent payments don’t care about 10 year historic trends; they’re just due when they’re due.
I’m sure there’s a decent collection of people here with enough disposal income that the idea of just having all their capital invested sounds lovely. But we’re inside a bubble here.
