It seemed like a perfectly good contrarian theory.
Driven by a demand for deposits, and bolstered by funding from the Troubled Asset Relief Program, the 19 largest banking companies in the country would break with tradition and pay higher-than-average interest on certificates of deposit and money market accounts.
But then Market Rates Insight, a research firm in San Anselmo, Calif., ran the numbers and found it wasn’t true. Score one for the big guys’ perceived stability over smaller competitors’ higher rates, experts say.
According to the firm’s report, the national average rate for a one-year CD was 1.2% for the top 19 banks, compared with an average rate of 1.62% for 1,300 other banks, during the Jan. 16-May 26 period. For money market accounts up to $100,000, the top 19 banks’ national average was 0.53%, compared with 0.78% for the other banks.