LEDGER ENTRY 002

4.75%.

That is the Federal Reserve benchmark rate as of Q1 2025 — the rate at which US banks borrow money from the Federal Reserve overnight. — Federal Open Market Committee Statement, November 2024.

The average savings rate offered by the ten largest US retail banks: 0.46%. — FDIC National Rate Survey, March 2025.

The difference on $25,000 held for one year: $115 versus $1,237. That is $1,122 left in the bank's ledger rather than yours — not through bad investments, not through market risk, through inertia.

When the Federal Reserve raises its benchmark rate, mortgage and credit card rates respond within weeks. The average credit card APR in Q1 2025 stands at 21.76% — up from 14.51% in March 2020, closely tracking the Fed's rate path. — Federal Reserve G.19 Consumer Credit Report, Q1 2025.

Savings rates respond far more slowly, and far less completely. The academic term is deposit rate rigidity. For the ten largest US retail banks, net interest income in 2024 totaled $285 billion. — FDIC Bank Financial Performance Report, 2024.

The depositor bears the cost. The bank retains the benefit.

The numbers in full: 0.46% — Average savings rate, ten largest US retail banks 4.75% — Federal Reserve benchmark rate 4.50–5.10% — Average rate, FDIC-insured high-yield savings accounts $1,122 — Annual interest lost on $25,000 at the rate differential $285bn — Net interest income, ten largest US banks, 2024

A high-yield savings account is a standard FDIC-insured deposit account — identical in legal protection to any high street savings account. The FDIC insures deposits up to $250,000 per depositor, per institution. The risk profile is identical. The rate differential is not.

Switching a savings balance from a high street bank to an FDIC-insured HYSA requires no minimum balance at most providers, no lock-in period, and typically three to five business days to complete. The rate differential begins working on Day 1.

A note from London: The Bank of England base rate sits at 4.75% as of Q1 2025. The average instant-access UK savings rate across the ten largest high street banks: 1.86%. The pattern is identical across every major economy. The gap between the central bank rate and the retail deposit rate is the mechanism. The Wealth Ledger tracks it regardless of currency. — Bank of England Monetary Policy Committee, March 2025 / Moneyfacts UK Savings Survey, March 2025.

Next in the ledger: 23% of Americans have a material error on their credit file. The average additional interest paid over a 30-year mortgage when a credit score is suppressed by 100 points: $204,000. The dispute process is free.

The Wealth Ledger | newsletter.wealthledger.co "The ledger records what others overlook."