Deposit Accounts APY Projection for November 2011

by tom 31. October 2011 16:19

Each month, Market Rates Insight offers a projection of national APY performance for the coming month.  During this month, the national average APY for Regular term accounts is projected to decrease 1 bps to an APY of 0.60%. The national average APY for Special term accounts is projected to decrease 2 bps to an APY of
0.94% (Figure 1).

image

Among Regular term accounts, there will be a slight decrease of 1 bps in the 3, 6, 12, 48 and 60-month CDs to the an APY of 0.13%, 0.21%, 0.33%, 0.99% and 1.24% respectively. Among the Special term accounts, the 3 and 6-month CDs are projected to decrease 3 bps each to an APY of 0.32% and 0.52% respectively. The 24 and 60-month CDs are expected to decrease by 2 bps each to an APY of 0.85% and 1.29% respectively.

Liquid Accounts Projection

The national average APY for Regular liquid accounts is projected to remain flat at 0.14%. The national average APY for Special liquid accounts is projected to increase 1 bps to an APY of 0.47% (Figure 2).

image

Regular checking account APY is projected to remain flat at 0.11%; whereas savings and MM will decrease 1 bps each to and APY of 0.15% each. Among the Special liquid accounts, checking is no longer offered, and savings is projected to remain flat at 0.65% and MM Special is projected to increase by 2 bpt to an APY of 0.29%.

Note: The monthly APY projection for deposit accounts is based on national averages and has a confidence
level of 95%. Identical projection for individual pricing regions (states) may be ordered. This
projection accounts for customary fluctuation in economic indicators such as Fed funds rate, inflation
and others. However, the projection may have to be revised if a drastic change occurs in some of the
economic indicators during the projected month.

Weekly Term Accounts APY Spread and Premium Index–October 24

by Tom 24. October 2011 09:30

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

Mispricing Retail Deposits Will Cost Banks Money

by tom 21. October 2011 13:55

Deposit mispricing is expensive for banks and credit unions. In fact, it is the third larges expense for banks. And poor deposit pricing is usually the result of one of three common errors.

If you don’t know what those errors are, you need to join our free Executive Briefing on Wednesday, October 26”

Topic: The #1 Most Common Pricing Error

When: Wednesday, October 26th, 2011 (two opportunities)

Where: Online 20-minute live webinar.

To register send email to pat.townsley@marketratesinsight.com.

We will be offering the webinar, live, twice on October 26th. The webinar are below:

Wednesday, October 26th, 2011

SESSION ONE

SESSION TWO

Eastern

11:00 AM

Eastern

2:00 PM

Central

10:00 AM

Central

1:00 PM

Mountain

9:00 AM

Mountain

12:00 N

Pacific

8:00 AM

Pacific

11:00 AM

Alaska

7:00 AM

Alaska

10:00 AM

Hawaii

5:00 AM

Hawaii

8:00 AM

We hope you can join us.

Weekly Term Accounts APY Spread and Premium Index–October 17

by tom 18. October 2011 15:06

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

Latest Revenue Figures Show Bank Earnings On The Rise

by tom 18. October 2011 10:49

Well the numbers are in, and it looks like profits are up for the big banks, or at least for Citigroup and Wells Fargo.

According to a report in yesterday’s Silicon Valley/San Jose Business Journal, Citigroup posted a 74 percent increase in profit, up $3.8 billion ($1.23 per share) in three-quarter Citilogorevenue. The majority of that profit seems to be coming from “a paper gain of about $2 billion and $1.4 billion from reserves set aside to cover future loan losses.” This despite the fact that revenue remained flat at $20.8 billion and despite a weak performance from the investment banker group. This from Vikram Pandit, Citi’s Chief Executive Officer talking about yesterday’s earnings news:

“We continued to manage our risk prudently while growing the businesses that are core to our strategy. We have reduced the size of Citi Holdings to 15% of our balance sheet and further improved our financial strength. We are very well positioned as we help our clients navigate the world's current trends and key opportunities.

"In addition, over the past few years we have significantly strengthened our retail partner cards business and it has earned $2.2 billion pre-tax through the first three quarters. After a careful review of the business, which took into account current trends in credit and technology, we have decided that it makes strategic sense to move retail partner cards and a vast majority of its assets from Citi Holdings into Citicorp. The transition will be completed by the end of this year."]

As reported in the Dallas Business Journal yesterday, Wells Fargo reported a 21 percent earnings jump in the third quarter. Wells Fargo posted a net income of $4.1 billion ($0.72 per share) compared to $3.3 a year earlier. This despite the fact that revenue was down for the quarter, falling to $19.6 billion from $20.4 billion a year ago. The bank is crediting strong loans and an increase in deposit growth for the increase in earnings:

“The economic recovery has been more sluggish and uneven than anyone anticipated,” WellsWellsSquare Fargo's chairman and CEO, John Stumpf, said in a statement. “We can’t change the economic environment, yet we have worked hard to control the variables we can – making our products and services more relevant to individuals and businesses, focusing on the customer, making as many loans as possible and growing new relationships – as well as fostering longtime ones."

If these reports from two of the major trends spark a trend, then banks are going to increasingly rely on fees and deposit growth to spur earnings.

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Banking Trends | Building Deposits | In The News

Weekly Term Accounts APY Spread and Premium Index–October 10

by tom 10. October 2011 13:23

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

How Do Bank Checking and ATM Fees Stack Up?

by tom 7. October 2011 19:05

There has been a lot of controversy in recent weeks with Bank of America’s announcement that they are imposing a $5 monthly fee on ATM transactions. Senator Richard Durbin’s response was to tell depositors to bank elsewhere, which led BofA CEO Brian Moynihan to remind the market that they are in business to make money and they should be allowed to earn a profit. This from the CNNMoney:

Bank of America's CEO defended his bank's new $5 fee on debit cards on Wednesday, saying that customers and shareholders understand the bank has a "right to make a profit."…

Moynihan stopped short of criticizing President Obama who earlier this week said to ABC that banks don't have an "inherent right" to a "certain amount of profit."

But BofA's chief did say banks have an inherent right to make a profit in an interview Wednesday with CNBC's Larry Kudlow at the Washington Ideas Forum, sponsored by the Newseum, the Aspen Institute and the Atlantic magazine.

"I have an inherent duty as a CEO of a publicly owned company to get a return for my shareholders," Moynihan said.

So how are the fees stacking up now to help banks build profits? Here’s the latest roundup from ABC News on checking fees for the 10 largest banks:

Bank of America

  • Checking: $25 deposit to open; $8.95 monthly fee unless statements are paperless and deposits/withdrawals are done online or by ATM.
  • Debit Card: Included with all checking accounts (no additional fees); $5 debit fee to be rolled out in early 2012, which can be waived under certain circumstances.

2. Wells Fargo

  • Checking: $100 deposit to open; $5 monthly fee unless direct deposit or average balance of $1,500.
  • Debit Card: Included with all checking accounts (no additional fees); test marketing $3 debit fee in five Western states, possible national rollout.

3. JPMorgan Chase

  • Checking: $25 deposit to open; $12 monthly fee unless direct deposit of at least $500, minimum balance of $1,500 or $5,000 average daily balance in linked accounts.
  • Debit Card: Included with all checking accounts (no additional fees); test marketing $3 debit fee in Georgia and Wisconsin, possible national rollout.

4. Citigroup

  • Checking: $0 to open; $8 monthly fee, waived if account has two of the following: direct deposit, online bill payments, ATM withdrawal, debit card purchase.
  • Debit Card: Included with all checking accounts (no additional fees).

5. US Bank

  • Checking: $50 to open; $6.95 monthly fee with online statements or $8.95 with paper statements unless direct deposits of at least $500 or average account balance of $1,500.
  • Debit Card: Included with all checking accounts (no additional fees).

6. PNC

  • Checking: $25 to open; no monthly fee.
  • Debit Card: Included with all checking accounts (no additional fees).

7. TD Bank

  • Checking: $0 to open; $2.99 monthly fee with online statements or $3.99 monthly fee with paper statements.
  • Debit Card: Included with all checking accounts (no additional fees).

8. Capital One

  • Checking: $50 to open; $8.95 monthly fee unless $300 minimum daily balance or monthly direct deposit of at least $250.
  • Debit Card: Included with all checking accounts (no additional fees).

9. SunTrust

  • Checking: $100 to open; $7 monthly fee unless minimum balance of $500 or direct deposit.
  • Debit Card: $5 monthly fee for unlimited debit card usage.

10. BB&T

  • Checking: $50 to open; $10 monthly fee unless direct deposit, $1,500 average balance or a mortgage with BB&T.
  • Debit Card: Included with all checking accounts (no additional fees).

Market Rates Insights tracks bank fees and new banking products as part of our research for banks and credit unions. If you need to get a better understanding of the competitive forces affecting bank products in your market, we can help.

Deposit Accounts APY Projection–October 2011

by tom 4. October 2011 12:41
image

Every month, Market Rates Insight offers a projection of deposit accounts APY for the month. Here is the projection for the month of October 2011:

Term Accounts Projection

During this month, the national average APY for Regular term accounts is projected to decrease 3 bps to an APY of 0.59%. The national average APY for Special term accounts is projected to remain flat at 0.99% (Figure 1).

Among Regular term accounts, the 60-month CD is projected to have the greatest decrease of 6 bps to an APY of 1.22%, whereas the 48, 36, 24, 12 and 6--month CDs are projected to decline by 5, 4, 3, 2 and 1 bps respectively (Page 3, figure 3). Among the Special term accounts, the 3-month CD is projected to decrease 3 bps to an APY of 0.32%, and the 48-month CD is projected to increase 7 bps to an APY of 1.37% (Page 3, figure 5).imageimage

Liquid Accounts Projection


The national average APY for Regular liquid accounts is projected to decrease 1 bpt to an APY of 0.14%. The national average APY for Special liquid accounts is projected to remain unchanged at an APY of 0.48% (Figure 2).

Regular checking account APY is projected to remain flat at 0.11%; savings flat at 0.16% and MM flat at 0.16%. Among the Special liquid accounts, checking is no longer offered, and savings is projected to remain flat at 0.65%. MM Special is projected to increase by 1 bpt to 0.31%.

(NOTE: The monthly APY projection for deposit accounts is based on national averages and has a confidence level of 95%. Identical projection for individual pricing regions (states) may be ordered. This projection accounts for customary fluctuation in economic indicators such as Fed funds rate, inflation and others. However, the projection may have to be revised if a drastic change occurs in some of the economic indicators during the projected month.)

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APY | In The News

Relationship Banking Eliminates Bitter Pill of New ATM Fees

by tom 3. October 2011 10:09

Last week, we noted that Bank of America had announced a new $5 monthly fee for ATM transactions, and that fee announcement has generated a flood of queries from customers. Bank of America is giving some customers immunity from ATM fees – all they have to do is deepen their relationship with the bank.

According to a report in the Phoenix Business Journal, if you hold a mortgage, credit card, or investment account with Bank of America, chances are you will be immune from newly imposed fees:

“BofA (NYSE: BAC) is instituting a new $5 per month debit card fee for banking customers at the beginning of next year.

“But bank officials say if a customer has a mortgage or credit cards through BofA, or investments via Merrill Lynch, they are likely to immune from the new debit fees as well as recently instituted monthly maintenance fees on banking accounts.”

Clearly, despite new profit pressures from Dodd-Frank and other economic factors, banks are still striving  to promote a larger share of wallet through relationship banking, Customer Loyalty still pays off in the end.

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Banking Trends | In The News | Fees

A Sea of Fees–Bank Fees are Hitting All-time Highs

by tom 29. September 2011 17:48

In an effort to recoup profits in the current economic downturn, banks are continuing to raise fees across the board. This from the New York Times yesterday:

“Average fees for withdrawals from out-of-network automatic teller machines, as well as fees for bounced checks, have hit new highs, according to a newly released study from Bankrate.com. The average fee that banks charge noncustomers for using their ATMs is now $2.40, up 3 percent from last year. The average bounced check fee, meanwhile, is now $30.83, a record. Banks are also slowly abandoning free checking accounts, although fees can still be avoided by arranging for direct deposit or keeping a minimum balance in the account. For non-interest-bearing accounts, the average monthly fee is $4.37, up from $2.49 last year, and the balance needed to avoid it averages $585, more than double the $249 balance from a year ago. For interest-bearing accounts, the average fee jumped to $14.15 from $13.04 last year. The balance needed to avoid the fee rose to $5,587, from $3,883.”BofA_atms

This was followed by today’s news that Bank of America will start imposing a $5 monthly ATM fee starting next month. This on top of news we reported here earlier that Wells Fargo is going to start experimenting with $3 ATM fees.

“Paying to use a debit card was unheard of before this year and is still a novel concept for many consumers. But several banks have recently introduced or started testing debit card fees. That's in addition to the spate of other unwelcome changes checking account customers have seen in the past year.”

The competitive landscape in banking is changing with the times, and Market Rates Insight’s research will continue to change as well to keep track of the latest trends.


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