Think the 3-6-3 rule is a new investment strategy you can employ with a few quick lessons? Think again. It is actually a slang term describing the supposed practices of bankers. The “joke” was that bankers offered a 3% interest rate to depositors, lent those same funds at twice that rate (6%) and then headed out to golf by 3:00 p.m. in the afternoon.
Anyone over the age of about 20 will certainly remember the days when banks would close by 3:00 p.m. on the dot, were rarely opened on Saturday and had restricted hours when they did. While the 3-6-3 rule may have had some validity in the 50s, 60s and 70s, the banking industry has become considerably more competitive since.
Regulations put in place after the Great Depression lead to a very controlled environment within the banking industry. Rates were regulated, making competition nearly non-existent. Changes in those regulations, as well as the spread of technology and information have forced banks to pursue customers more aggressively. The 3-6-3 rule rarely applies, and in fact, banks have expanded their offerings into brokerage services, insurance and many other areas.
Some financial experts promote the idea of sending banks back to the era when all they did was banking. They argue that the increased involvement of banks in other services is nothing more than the promotion of legalized gambling. It is unlikely that this is a genie that will be put back in its bottle, but at least for now, you can enjoy the longer hours, and perhaps even competitive rates while the banks work harder for your money.
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Well, I definitely do not agree to the above statement that we enjoy competitive rates or rather, if we do that, at what cost to society. A bank should be a boring institution and ensure stability, exactly the opposite of what is presently going on. Interest rates are manipulated by the Central Banks and the risk premium (part of the interest rate) is being close to nil as all risks are allocated to the Governments (actually the tax payer) who will transfer losses to the tax payer when the shit hits the fan. All the while those in charge continue to enjoy their perks and benefits instead of rotting in jail.