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Insights Into How Deposit Rates Are Set At A Community Bank

Ken Tumin
Ken Tumin   |     |   5,691 posts since 2009

This North County Times article provides some interesting insights into the decision making process of a CEO of the California Community Bank in setting rates:

Hartwig's core problem is a balancing act. He must pay enough on interest rates to keep depositors interested, so he can lend their money to businesses at a higher rate. Low interest rates cause volatility in deposits. But he can't charge too much for the loan because competition is tough in North San Diego County.