<prompt> Human: Interest rates have always been neglible in bank accounts since Ive done any sort of investing everything is in VTSAX now. However back when interest rates at banks were higher than say 5-7--which is about what the expected stock market returns are--was there any purpose in putting money into an index fund since there are risks involved? Is there a tipping point for bank interest rates to be at to keep it there rather than an index fund?  <response>: Expected market return is based on history is 10 on average per year. 7 is the after-inflation figure, so 5-7 pre-inflation return isnt competitive.Interest income is also ordinary income, so you pay your marginal tax rate on it. Qualified dividends and long-term capital gains are traditionally taxed at lower rates than ordinary income, so even if real returns were identical, the tax treatment would likely make investments preferable. 