With the bankruptcy of Silicon Valley Bank (SVB Bank) and the uncertainty that a financial crisis arouses, some regional banks in the United States have begun to increase the rates of your savings accounts and their certificates of deposit.
According to analysts, these actions, which are beneficial for savers, would be seeking avoid customer flight to larger banks.
Following the bankruptcy of SVB Bank, a section of savers began withdrawing their money from smaller regional banks to take it to larger bankswhich gave them greater confidence.
In response, some regional banks have begun to increase benefits for fees paid on savings accounts and certificates of deposit, such as a form of incentive for your customers.
But analysts see these actions not only as a way to prevent customer flight, but as a strategy for these regional banks attract new savings accounts and with this fresh money to prop up its reserves.
“It is likely that concerns about maintaining deposit levels have put upward pressure on some deposit rates at some banks,” says Ken Tumin, founder of DepositAccounts.com, in a report for usa today.
Tumin added that these movements would also be a way to prepare for an eventual “bank run.”
Among the banks that have taken steps to raise their savings rates or their certificates of deposits highlights online banking.
According to analysts, online banking would have the advantage that it’s easier for your customers make money transfers, compared to traditional banking that requires an operation in a branch.
One case is that of Ally Bank, which raised the rate on its 11-month certificates of deposit from 4% to 4.75%, just one day after SVB Bank went bankrupt.
According to a calculation made in a USA Today report, a 0.75% rate hike on savings certificates translates to an additional $138 after 11 months for a $20,000 deposit.
You may also like:
– The failure of SVB Bank will cost about $20 billion, the FDIC estimated
– First Citizens could reach an agreement to buy Silicon Valley Bank
– Why the failure of Silicon Valley Bank continues to affect the banking system
Source: La Opinion
