Weekly Term Accounts APY Spread and Premium Index-August 20

by tom 20. August 2012 15:41

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

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Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

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APY | National Pricing Indicator | Blog | Market Research | Deposit Products | CD Balances

Weekly Term Accounts APY Spread and Premium Index-August 13

by tom 13. August 2012 18:42

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

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Weekly Term Accounts APY Spread and Premium Index-August 6

by tom 6. August 2012 15:55

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

Customers Want Free Checking, But Will Pay for Frills

by tom 2. August 2012 09:06

Dan Geller, Executive Vice President of Market Rates Insight, recently contributed this article to American Banker magazine:

Consumers are looking for convenience, especially with the aid of online resources, and banks now have a new opportunity to cash in. A new category of "lifestyle financial services" has been emerging in recent years and these services not only offer greater convenience and convenient transactions for consumers, but also open up new opportunities for additional fee income for banks and credit unions. According to Market Rates Insight's latest study, consumers not only want these new lifestyle financial services, they are willing to pay their bank or credit union for providing them.

imageThese emerging services have evolved over the last two decades due to both changes in personal lifestyle and advances in technology. Some of them have evolved due to demand for increased mobility, better time efficiency, digital identity management and more media connectivity. As new technologies have emerged to make banking easier, consumers are demanding more from their banks, thus redefining the role financial institutions will play in the future.

Of course, banks and credit unions will continue to be a resource for funding and savings for individuals, families and business, but an auxiliary role is emerging for financial institutions to provide additional services, and those services will become the deciding factor when consumers choose where to put their money.

In the past consumers have viewed basics such as free checking accounts as things to which they are entitled, and have understandably been resistant to paying increased fees for these "grandfathered" services.

However, MRI's new study on service fees reveals consumers view lifestyle financial services as enhancements and are willing to pay for the convenience and efficiency they provide. The study found 67% of consumers are likely to use services like credit score reporting, identity theft alerts, mobile deposit, person-to-person payments, personalized couponing, overdraft transfers and prepaid reloadable cards if those services are offered by their financial institution. And, while consumers are resistant to paying for services such as maintenance fees on checking accounts, they are more than willing to pay an average fee of $3.63 per month for each of these financial lifestyle services.

Based on the findings from the service fees study, there are two major reasons why financial institutions need to adapt to provide these new kinds of services to consumers. First is the sharp decline in fees paid for traditional financial services as a result of both regulatory and behavioral changes. The amount of non-interest income generated by U.S. banks on fees from deposit accounts declined from $36.2 billion in January 2011 to $34.1 billion by the end of the year – a drop of $2.1 billion or 5.8%. This is part of a trend that started five years ago; income from service fees on deposit accounts fell from $39.2 billion in December of 2007 to $34.1 billion by December of 2011, a fall of $5.1 billion or 13%. This trend is not likely to change in the near future.

Second, banks and credit unions need to consider how these new services affect customers and members. These lifestyle services are having a profound impact on consumers' lives, which means access to these offerings is becoming a deciding factor when choosing a bank or credit union. The more demand for these services grows and they become a part of everyday life, the more weight they will have with consumers when picking a financial institution for their lending or saving needs.GellarDan107x107[1]

Nearly seven in 10 consumers have made it clear that they want these new services and are willing to pay for them. The path toward new profits can't be marked any more clearly than that.

Dan Geller is executive vice president of Market Rates Insight of San Anselmo, Calif., which provides competitive research and analytics to financial institutions. He can be reached at dan.geller@marketratesinsight.com.

Weekly Term Accounts APY Spread and Premium Index-July 31

by tom 30. July 2012 15:47

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

Weekly Term Accounts APY Spread and Premium Index-July 23

by tom 23. July 2012 18:14

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

A Trillion Dollar Question

by tom 18. July 2012 14:54

The following article was contributed to Banking Strategies by Dan Geller, Executive Vice President and principal analyst for Market Rates Insight.

Between now and yearend, nearly $1 trillion could shift from non-interest bearing checking accounts to other deposit accounts – but which ones?

One  question on any banker's mind right now should be: where will nearly $1 trillion in deposits go when the unlimited insurance coverage of non-interest bearing transaction accounts expires on December 31? Unless extended by Congress, any amount in excess of $250,000 in one deposit account will not be covered by the Federal  Deposit Insurance Corp. (FDIC)

The majority of these funds are sitting right now in non-interest bearing accounts, mostly checking, a category that imageexperienced the greatest growth in balances since the beginning of the recession. In December 2007, which is the official start of the recession, the total amount deposited in non-interest bearing accounts was about $1.2 trillion. By the end of 2011, this had grown to $2.3 trillion – an increase of $1.1 trillion.

The enormous growth in balances is attributed to the various programs that provided unlimited insurance to non-interest checking accounts. The first was the FDIC’s Temporary Liquidity Guarantee Program (TAGP), which was instituted on October 14, 2008. During the period that TAGP stayed in effect, until December 31, 2010, balances in non-interest bearing accounts grew to $1.7 trillion – an increase of nearly $500 billion since the beginning of the program.

At the end of 2010, TAGP was replaced by the Dodd-Frank Act, which extended the unlimited insurance on non-interest bearing transaction accounts for two more years, until December 31, 2012. However, unlike the TAGP, the Dodd-Frank Act definition of non-interest bearing transaction accounts did not include either low-interest Negotiable Order of Withdrawal (NOW) accounts or Interest on Lawyer Trust Accounts (IOLTAs).  This extension gave another boost to balances of non-interest bearing accounts, which soared to nearly $2.3 trillion by December 31, 2011, an increase of $600 billion in one year.

So the trillion dollar question remains: where are all the excess funds likely to go?  The answer might be discovered by analyzing the data from the first quarter of 2012, when checking account balances decreased by $43 billion for the first time since the introduction of the unlimited insurance program in late 2008, potentially signaling the early stages of the excess funds shift. At the same time, savings account balances increased by $171 billion, which could suggest that some or all of the excess funds (over the $250,000 insurance limit) shifted to FDIC-insured savings accounts. Both certificate of deposit and money market balances declined in the first quarter of 2012, which indicates that excess funds from checking accounts did not flow there.

The likelihood, then, that the excess funds will be moved outside the protection of FDIC insurance at yearend is very slim. If consumers were willing to trade yield for safety by depositing funds in non-interest bearing accounts just to have it insured, they are very likely to keep the funds in FDIC-insured deposits for as long as their confidence in the economy remains shaky and until equity market volatility subsides.

Mr. Geller is the executive vice president of San Anselmo, Calif.-based Market Rates Insight, where he oversees the research and analytics services of the company. He can be reached at dan.geller@marketratesinsight.com.

Weekly Term Accounts APY Spread and Premium Index-July 16

by tom 17. July 2012 14:47

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

Tags: , , ,

APY | CD Balances | National Pricing Indicator

Weekly Term Accounts APY Spread and Premium Index-July 9

by tom 12. July 2012 17:40

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

Tags: , , ,

APY | National Pricing Indicator | CD Balances | Banking Trends

Weekly Term Accounts APY Spread and Premium Index-July 2

by tom 3. July 2012 14:23

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image


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