The aggregated of demand, ability to move funds effectively turn the underlying accounts into commodities that can compete based on that one feature (yield).
The other difference is that this money is fluid unlike a CD. With enough data the app should be able to predict how much of the aggregate funds would remain static in the account over what periods of time though. So banks could offer rates based on that aggregate guidance.
If you can't get a higher rate with say a billion dollars belonging to one decision maker, how would people with much less improve their returns by coordinating?
What you call the money being "fluid" would tend to make it less valuable than CD deposits.
If bundling the assets of a hundred or a thousand people made a difference, then entities with millions would be able to get the same deal already. But 1 year treasuries only pay like 1.5%, right? Who is getting >2% risk free?
The key here is that the app automates the movement of the funds.
The app is the UX that:
- Solves a pointed customer problem (ex: getting best yield, moving money at right time of month, etc...)
- Removes the friction of moving accounts
which turns an insured valid account into a commodity that is evaluated purely on the yield offered at that time.
The other difference is that this money is fluid unlike a CD. With enough data the app should be able to predict how much of the aggregate funds would remain static in the account over what periods of time though. So banks could offer rates based on that aggregate guidance.