New Market Rates Insight Report Reveals the 19 Largest "Stress Test" Banks Offer Lower Deposit Rates

June 24, 2009 - PRLog -- A new research report from Market Rates Insight (MRI, www.marketratesinsight.com), a leading research firm that tracks rates for deposits, loans, and fees to help financial institutions price with precision, reveals that the average deposit rates offered by the 19 leading United States “stress-test” banks, the top banks that received TARP relief, are actually pricing well below the average of all other banks. The findings do not show any systematic pattern of higher and more aggressive deposit pricing practices by the bigger banks.

“The notion that the largest banks are pricing deposits more aggressively is not supported by the analysis,” said Dr. Dan Geller, Executive Vice President at Market Rates Insight.  “It is possible that in some specific locations some big banks do offer higher special or promotional deposit rates than smaller banks, but not in significant numbers to influence the national average.”

The comparative analysis in MRI’s latest National Pricing Indicator report shows that the top banks are pricing one-year CDs and Money Market accounts up to $100,000, including special and promotional rates, below the national average of the smaller banks. The national average for the top 19 banks for the examined CD was 1.20 Annual Percentage Yield (APY), where the national average for all other banks for the same type of CD was 1.62 APY.  For Money Markets, the top 19 banks’ national average was 0.53 APY as opposed to 0.78 APY for all other banks.

The analysis was designed to include all special and promotional rates in the averages because banks typically offer higher rates for those types of deposit products. For example, the FDIC National Average Rate, which includes only standard rates, was 1.27 on May 25 for a one-year CD up to $100,000. By comparison, the national average for all the non stress-test banks for the same product on May 25 was 1.44 – the 17 basis point difference is attributed mostly to the inclusion of special and promotional rates in this analysis.

The study, which covered the period of January 16 to May 26, 2009, includes the average rates for the top 19 banks, and a sampling from 1,300 other banks. The 19 stress-test banks include: American Express, Bank of America, BB&T, The Bank of New York – Mellon, Capital One Financial, Citigroup, Fifth Third, GMAC, Goldman Sachs, JPMorgan Chase, Key Corp, MetLife, Morgan Stanley, PNC Financial, Regions Financial, State Street Corp, SunTrust Bank, U.S. Bancorp and Wells Fargo Bank.

The complete analysis, including a comparison of the maximum APY offered by the top 19 banks vs. all other banks is available upon request from info@marketratesinsight.com, or by visiting www.marketratesinsight.com.

Contact:

Dr. Dan Geller
Market Rates Insight
415-448-8813
Dan.Geller@MarketRatesInsight.com

Tom Woolf
Market Rates Insight
(415) 259-5638
tom.woolf@marketratesinsight.com

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About Market Rates Insight

For more than two decades, Market Rates Insight (MRI) has been helping subscribers price with precision by providing banks, thrifts, credit unions, and other financial institutions with accurate market intelligence on deposits, loans, and fees. MRI uses deposit surveys, mortgage and consumer loan surveys, fee and feature studies, scanned ads, new product alerts, and market share and money fund reports to give subscribers the intelligence they need to profitably react to emerging trends. MRI’s products include customized, web-enabled market research tools that report on rates, as well as online searchable databases, gauges, alerts, and dashboards that aggregate key client data to provide real-time views on how they stack up against market competitors.

Market Rates Insight is located in San Anselmo, California. For more information, see www.marketratesinsight.com.