With Deposit Rates Turning Negative in Europe, Investors Wonder What Will Happen in the U.S.

In the wake of the ECB’s rate cut, Europeans may soon be paying banks to hold their money. How can U.S. investors protect their cash against eroding interest rates?

New York, NY, June 6, 2014 — The European Central Bank’s announcement yesterday that it will lower interest rates in the Eurozone and charge banks to park their funds in Frankfurt overnight brings renewed attention to the problem of bank depositors earning little interest on their savings accounts.

“Bank depositors are already suffering from ultra-low interest rates on savings accounts. Many people are fundamentally uncomfortable with the idea of having to pay to keep their money in the bank,” says Gary E. Zimmerman, chief executive of Six Trees Capital LLC, the company behind “With today’s near-zero interest rates on offer from most banks, the real return on cash is often negative, even in the U.S.”

The ECB’s move is designed to spur banks to lend out more in the form of loans to European companies and individuals. By cutting its deposit rate to negative 0.1%, the central bank aims to boost economic growth in the region, which has struggled to overcome a sovereign-debt crisis that followed the global financial crisis and sparked a deep recession.

As the world emerges from the financial troubles of the last half-decade, central banks are signaling that low interest rates will continue. The U.S. Federal Reserve is ending its own quantitative-easing program, which pumped extra money into the economy, but rates are only expected to rise slowly for the next few years, unless inflation spikes sharply.

While more bank loans could have a positive effect on European businesses and encourage companies in the region to invest more, this is not good news for bank depositors.

Fortunately, depositors have options. In the U.S., online banks have lower operating costs than traditional brick-and-mortar banks and are thus able to pay higher interest rates to their depositors.

With Max (, Six Trees Capital LLC has built an automated system that helps depositors benefit from the higher rates on offer from FDIC-insured online banks. Today, Max’s members are earning a weighted average 0.87% on their cash, or 0.79% net of fees, which compares favorably to most bank accounts or money market funds that offer little to no yield.

The effects of compounding are important to an investor’s portfolio. Earning an extra 0.60% to 0.80% on deposits, year after year, can have a profound impact. Max members with high cash balances could potentially earn tens or hundreds of thousands of dollars in incremental interest over their investment horizons, simply by using Max to help continuously optimize their cash allocation across multiple online bank accounts.

Periodically ensuring that cash is deposited in the highest yielding savings accounts — while spread across enough banks to be adequately covered by FDIC insurance — is one way to enhance returns without taking on more risk. Many depositors, however, are too busy to focus on how they manage their cash. In a time of low interest rates, it’s crucial to keep on top of which banks are offering the best rates and move deposits accordingly — or let Max handle it for you, automatically.

What is Max?

Max, a new online service that helps investors automatically maximize the interest they earn on their bank deposits, launched in April on an invitation-only basis at

The service uses patent-pending technology to allocate investors’ cash among their own FDIC-insured bank accounts to take advantage of the higher interest rates offered by online banks. Because these online banks have lower operating costs than traditional “brick-and-mortar” banks, they are able to offer depositors significantly higher interest rates.

“Many depositors are sitting on a lot of cash, and are frustrated by the persistent near-zero interest rates. With Max, we’ve developed a service that helps our members earn more on their cash, automatically,” explains Zimmerman.

Until now, it has been difficult and time-consuming to manage multiple online bank accounts. Max solves this problem, employing a proprietary algorithm to determine an optimal allocation of cash among these accounts, based on prevailing interest rates and FDIC insurance limits. The service then automatically instructs funds transfers between these accounts to help ensure investors continue to earn as much as possible on their cash, even as rates change. By doing so, Max members can currently expect to earn 0.60% to 0.80% more each year in interest than they otherwise would from typical “brick-and-mortar” bank accounts or money market funds, all within an FDIC-insured environment.

“We believe there’s a smarter way to do everything. With Max, now there’s a smarter way to invest your cash in the bank,” Zimmerman adds.

More information about Max, including an explanatory video, can be found at

About Max

Max is a new automated online solution that helps depositors earn more on their cash balances. Max’s technology platform uses proprietary algorithms to help ensure a member’s cash is dynamically allocated to the member’s online banks offering the best interest rates at any given point in time, all while staying within an FDIC-insured environment. Max is not a bank and does not provide investment advice. More information can be found at

About Six Trees Capital LLC

Six Trees Capital LLC develops technology that makes the financial system better. The founder and managing partner is Gary E. Zimmerman, a former mergers and acquisitions investment banker and advisor to sovereign wealth funds that manage more than $5 trillion of capital. The firm’s backers include its founder and sophisticated angel investors. Six Trees’ advisory board includes a Harvard Business School professor, the former head of data privacy and security at IBM, and the chief technology officer of one of the top computer security consulting firms. Six Trees Capital LLC is based in New York City.