For banks competing with an increasing number of fintechs and nontraditional lenders for depositors, offering attractive deposit pricing is crucial.
As deposit rates have risen rapidly, customers are increasingly cognizant of where they’re putting their money. “Higher interest rates, as well as the banking crisis in March, led to an awakening of customers’ realizations of higher-yielding alternatives for deposits that may have been parked in non-interest bearing or low-yielding transaction accounts,” noted recent bank analysis from Morningstar. Banks are inching up deposit rates to try to hold onto existing customers and attract new ones — making it crucial that they do so strategically.
