The Fed’s move to raise its target interest rate to a range of 2.00% – 2.25% comes at a time when banks are already grappling with rising deposit costs.
Customer who seek a higher rate put the bank in a defensive position that often ends with the bank offering a rate that is above the optimal and fair price for that client’s deposit.
Long one of the most under-appreciated and least understood categories for banks, the role of the savings accounts may be on the brink of change due to the industry’s widespread disruption from technology.
For a long time during the current rate cycle, the continued expectation of rising betas was akin to the “Boy Who Cried Wolf.”
After a week away this summer, my husband and I came home to an overstuffed mailbox that contained no fewer than seven offers from banks that were vying for our checking business with rich offers worth hundreds of dollars. We tossed every last one of them in the circular file.
So you think you should launch a direct bank? After all, it could be a great way to scoop up deposits across the country at a time when most banks are struggling to acquire new customers and hang onto the ones they have.