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Follow on Google News | New MRI Research Shows People Trading Higher Return Rates for the Safety of Insured BanksTotal Bank Deposits Are Up $520 Billion from June 2008 to June 2009, Even Though the Average Interest Rate on Deposits Has Dropped 37%
By: Market Rates Insight According to the latest research On June 30, 2008, the national average interest rate for deposits was 2.80, and the total deposit balance was $6.22 trillion. However, as of June 30, 2009, the national average interest rate for deposit products declined to 1.77 while the total deposit balance increased to $6.74 trillion, an increase of $520 billion. For the reported 12-month period, the average interest rate for deposits decreased by 37 percent while total deposits increased by 8.4 percent. Based on this trend, consumers seem to be willing to secure their money in deposit accounts despite the fact that banks are offering lower return rates than alternative but more speculative investment options such as stock or mutual funds. “The findings of this analysis show that people prefer the safety of an insured deposit even if it means a lower return,” said Dr. Dan Geller, Executive Vice President at Market Rates Insight. “The $520 billion that have been added to deposits is not new money, so consumers must be transferring this cash from other investments. Clearly this is a symptom consumer uncertainty about the stability of the economy and its prospects for recovery.” The complete analysis can be viewed on the Market Rates Insight website at this location: http://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 # # # 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. End
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