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The 3 Superbanks and the Effects on Depositors

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POSTED ON BY Ken Tumin

This MSNBC article reviews the 3 new superbanks that have been created this year as several of the nation's largest banks have been acquired by the healthier giants. These 3 banks now control about 32% of the nation's deposits. The article mentioned one of the results of reduced bank competition: higher fees. But it didn't mention another result: lower deposit rates. Some examples that we've seen this year include:
  • Countrywide (acquired by Bank of America, 11.3% of nation's deposits) Its SavingsLink account and CDs have dropped off the highest-rate lists. SavingsLink yield is now 3.15% APY for balances between $10K and $50K. Highest internet CD yield is now 3.90% APY.
  • WaMu (acquired by JPMorgan Chase, 10.2% of nation's deposits) WaMu's online savings account rate dropped from 4% to 2.50% and its 1-year CD yield fell to 3%.
  • Wachovia (acquired by Wells Fargo, 11.2% of nation's deposits) Wachovia's Featured CD rates have been falling, and they recently dropped some of the unadvertised long-term Featured CDs. Current Featured CDs for Texas include a 5% APY 60-month CD, 4% APY 12-month CD and a 3% APY 7-month CD.

Banks Mentioned in this Post:

Bank of America
Locations: 5,400   Health Rating: 4 stars		bank alerts   rate bank
Recent Posts: Zombie Accounts - Trying to Close a Ba... | Bank of America's New Checking Account...
Latest Review: "I travel alot, so I use BoA, to have easy access to ATM and cash only near my ..."
Chase Manhattan Bank
Locations: 5,695   Health Rating: 4 stars		bank alerts   rate bank
Recent Posts: History of Chase Bank Bonus Payouts | Chase Customers Shocked By Zero Checki...
Latest Review: "I have dealt with several banks in the past 13 years or so. I would say that m..."
Wachovia Bank
Locations: 6,293   Health Rating: 4 stars		bank alerts   rate bank
Recent Posts: Wells Fargo Appears to be Slowly Killi... | Update on Wells Fargo's New Way2Save P...
Latest Review: "I have been a customer of Wachovia for about 6 years now. Over those years ha..."

Tags: Wachovia Bank, Chase Manhattan Bank, Bank of America

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Post a CommentComments
In order of date posted. - Sort by votes
marc

marc (anonymous) - #1,

I don't think it's the reduction in competition lowering the rates in this case. It's the fact that the mergers made it such that the "trouble" bank of the combo was rescued by the "good" and therefore the formerly troubled entity no longer has to beg for deposits. Had they not merged, most likely the rates would have gone down anyway by way of the high-paying portion of the mergers not existing anymore.


1
trinidon2k

trinidon2k (anonymous) - #2,

man...this blows. I love Countrywide's bank (especially the fast ACH transfers), but this is just ridiculous. Time to start looking I guess.

I don't care if a bank is troubled or not. High rates bring in customers. Low rates make them leave.


1
BloggingBanks

BloggingBanks (anonymous) - #3,

This is definitely worrysome for depositors. We might get less bank bonuses as well..


1
Anonymous

Anonymous - #4,

Heck with them, I left $1 in their accounts.


1
Jim

Jim (anonymous) - #5,

Countrywide just lowered their CD rates.


1
Anonymous

Anonymous - #6,

What bank do you recommend for deposits?


1
Anonymous

Anonymous - #7,

I see "AmEx approved to become bank holding company" - wonder what that will do to the world of banking and rates.


1

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