US Banks Increase Pay for Sophisticated Consumer Deposits

US Banks Increase Pay for Sophisticated Consumer Deposits

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U.S. banks are beginning to pay corporate customers more in order for them to keep their deposits, according to a report from Reuters on July 18, 2017.

Only sophisticated customers have received this increase while normal customers must wait much longer than them to obtain more than a few cents per every $100 stashed in their accounts.

While discussing the recent earnings, executives said the following banks are among those who decided to lift the rate for rich customers’ deposits in the second quarter:

  • JPMorgan
  • Chase and Co.
  • Bank of America Corp.
  • Wells Fargo and Co.
  • PNC Financial Services Group

According to the Federal Deposit Insurance Corp., the average U.S. banks now pay four cents of interest per $100 deposited in checking accounts.

Although, it may benefit other customers because more banks will likely follow suit and start paying higher rates also to avoid customers leaving.

Bank of America’s CEO, Brian Moynihan, said that basic checking accounts “are zero interest and they will remain zero interest because that’s the nature of the beast.”

Some U.S. banks increased pay for sophisticated consumers deposits after he Federal Reserve’s decision to raise their base interest rates in June for the third time in six months.

Written by Brielle R. Buford
Edited by Cathy Milne

Source:

Reuters: U.S. banks pay up for big deposits as consumers get pennies

Top and Featured Image Courtesy of Ken Teegardin’s Flickr Page – Creative Commons License

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