“Act Now and Lock in” these Deposit Rates: Banking Cat-Fight Breaks Out Like We Haven’t Seen in Over 10 Years
“Act Now and Lock in” these Deposit Rates: Banking Cat-Fight Breaks Out Like We Haven’t Seen in Over 10 Years by Wolf Richter – Wolf Street
The Fed has left the room.
Now banks are sending me expensive fliers in the mail, offering higher rates on deposits, trying to attract my money. This goes way beyond the fliers I’ve been getting for years that offer a one-time bonus for putting a big chunk of money into an account that earns no interest. The photo below is part of a three-section glossy cardboard foldout that I got in the mail. It says that these rates are exclusively available at the local branch. To get this deal, I’d have to go there so they can stare into the whites of my eyes.
“Act now and lock in these competitive rates,” it says. I added the blue marks:
Union Bank, which is offering this, is not huge, with a little over $110 billion in assets. But it’s a storied San Francisco bank founded just after the Gold Rush. It still counts as a local bank, but it’s now owned by Japanese mega-bank Mitsubishi UFJ Financial Group.
It started late last year when I began noticing things. At first, I ran into it accidentally. Some banks were offering higher interest rates on CDs but only through brokers. At first, it was just a few banks, and rates were still low. Then there were more banks offering CDs at higher and higher rates. The other day, I found that Wells Fargo was offering the highest rates for these “brokered CDs,” for example a 13-month 2.25% CD. At the same time, it offered its existing clients near-zero rates.
Wells Fargo, Citibank, Bank of America, Morgan Stanley, and others want to reel in new money, and are willing to pay top dollars for this new money, in competition with other banks, but aren’t willing to raise interest rates for existing customers. Other banks, including American Express Bank and Goldman Sachs’ new consumer bank, Marcus, are offering higher rates to new and existing customers alike.