U.S. banks, such as Citigroup Inc. and Bank of America Corp., are paying savers the lowest average rates on record amid elevated joblessness and weak loan demand, data collected by Market Rates Insight shows.
Rates paid on interest checking, savings, money market and certificates of deposit fell in July to a national average of 0.99 percent, the San Anselmo, California-based data company said in a report released yesterday. That’s a record low for available data, said Dan Geller, the firm’s executive vice president.
When lending is soft, “there’s less need for deposits,” he said in an interview. “Banks usually don’t say ‘No’ to deposits, but they will pay the minimum that they can.” The national average rate paid to depositors 10 years ago was 5.69 percent, he said.
At Bank of America, a Growth Money Market Savings account pays New York residents as much as 0.4 percent on deposits below $10,000 and 0.85 percent for more than $500,000, the firm’s website shows. At Citibank, a Savings Plus account pays an annual rate of as much as 0.7 percent, according to its website.
“Our rates are reflective of the current environment and consistent with the industry,” said Anne Pace, a spokeswoman for Charlotte, North Carolina-based Bank of America.
Citigroup spokeswoman Natalie Riper said the New York-based bank offers higher rates to customers who open accounts at their local branches, versus online, and that rates paid vary by region.
“Citibank’s deposit rates are competitive,” Riper said. “In many markets, our money market savings rates are currently above 0.7 percent.”
Market Rates’ index measures rates and bonuses paid by banks for checking, savings, money market and bank CD accounts at 1,300 commercial banks and credit unions of all sizes across the country, Geller said. The report doesn’t specify rates at individual companies where returns can vary among products and regions. Market Rates provides data and analysis to financial services companies.
To contact the reporter on this story: Dawn Kopecki in New York at firstname.lastname@example.org.