Big depositors winning better rates at banks

|By:, SA News Editor

via Telis Demos and  Christina Rexrode at the WSJ

"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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