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Are You Ready for a Cashless Society?WSJ Article: Banks Wage Rate War For Deposits
POSTED ON BY Ken Tumin
This WSJ article looks into the condition that we've seen this year in which banks are fighting for our deposit dollars. Interest rates on CDs and savings accounts have stayed reasonably high this year when you consider how much the fed funds rate has declined. Banks are in need of deposits to make new loans. The article also mentions another reason banks are so interested in attracting deposits:
However, we may not see too many great deals from weak banks:
Perhaps that's the reason Downey Savings Bank and BankUnited are no longer offering great CD deals like they were in previous months.
Note, if you have trouble accessing the article, try accessing it via Goolge News. Thanks to the reader who emailed me the link to this article.
Banks covet deposits because of this year's failures of IndyMac Bank, Washington Mutual Inc.'s banking operations and other institutions. Bank executives have been rattled by those seizures and the woes of beleaguered banks such as Wachovia Corp. and National City Corp., from which panicky customers yanked their money. Many lenders are now ratcheting up rates to shore up their deposits.
However, we may not see too many great deals from weak banks:
In recent weeks, federal regulators have intensified their scrutiny of bank deposits. Among other things, they are examining the rates banks are paying, according to people familiar with the matter. Regulators often consider rising rates as an indication that a bank might be in peril.
Perhaps that's the reason Downey Savings Bank and BankUnited are no longer offering great CD deals like they were in previous months.
Note, if you have trouble accessing the article, try accessing it via Goolge News. Thanks to the reader who emailed me the link to this article.
All my cash is still in Rewards checking @ 5-6.3%.
Alliant is still paying 3.5%.
Re: Grip firmly on the obvious
If banks (or any other financial institutions) want your money dearly, they will pay dearly for it. If banks do not give a rat's patootie for your money, they will tend to pay less.
Such is capital, and the flow thereof.
Thus spake Tharathustra or Bozo, as the case might be.
Bozo
I have a modest amount of money in a Wells Fargo savings account. I use it only for the convenience of the ATM withdrawals. Above $350 balance, there is no service charge. The interest I earned last month was, like, seventeen cents or something.
Well, I'm exaggerating, but you get my drift.
The point is: I use Wells Fargo as a convenient ATM. They don't pay me, I don't pay them. Seems fair.
Bozo