American Banker: Rise in Deposit Costs
American Banker tells us, "Why online banks aren't sweating the rise in deposit costs." They write, "Online banks are starting to feel more heat from depositors seeking higher-yielding savings options, but the increases so far are modest in light of the Federal Reserve's large rate hikes. The Fed's aggressive moves, including another 75-basis-point rate increase on Wednesday, have led online banks to pay higher rates to individuals with high-yield savings accounts. Critically, however, those banks have been able to raise their rates by less than the Fed's hikes, a lag that is putting a lid on rising deposit costs for now." It adds, "While competition in high-yield savings accounts is heating up, it 'doesn't seem to be getting out of hand,' said Ken Tumin, the founder of DepositAccounts.com. The somewhat benign outlook may continue for some time given worries about a looming recession, which increasingly has traders believing the Fed will end up cutting rates next year to boost growth." (Note: Let us know if you'd like to see a copy of our "`Bank Deposit Intelligence" collection, which tracks the highest-yielding bank deposits, or our Brokerage Sweep Intelligence product, which tracks FDIC-insured brokerage sweep options.)
