"The jig is up," says James Gilligan, the assistant treasurer at Great Plains Energy. He's referring to banks no longer being able to get away with offering 0% (or close to that) deposit rates after a series of Fed interest rate hikes.
No bank wants to lose customers, but they're not going to lose a ton of sleep over a few John Does doing some rate shopping. Big corporate depositors, however, are a different story, and treasurers are using that leverage to demand and win better rates.
The average interest rate paid by U.S. banks rose to 0.34% in Q2 from 0.26% a year earlier, and bankers say business customers are behind the rise. "We defend our turf," says Fifth Third (NASDAQ:FITB) chief Tayfun Tuzun. A typical corporate deposit rate is nearly 1%, he says, vs. the average retail savings rate of 0.18% (as computed by Jefferies).
Previously: Depositors unite? Banks aren't raising rates (July 12)
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