Finding the sweet spots with deposit rates
As we visit with Dashboard clients, we’re hearing plenty of buzz about the need to further raise deposit rates to remain competitive and meet customer expectations.
With the likes of Sallie Mae and American Express promoting no-minimum-balance savings accounts at APYs at 1.75% or above, consumers may be paying more attention to their yields. And watch out: 20 percent of consumers will move their funds elsewhere for an increase of 110 bps, according to new research by Raddon.
Raddon’s guidance to bankers is that it takes a rate increase of 82 bps to move your existing customers into one of your other deposit products. And to attract new money from outside the institution, 96 bps over the competition is the sweet spot.
Raddon’s guidance is helpful, but as you work to identify the sweet spots for your own deposit products, you’ll need to rely on multiple sources of financial and competitive market data.
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