In the past three years an incredible $1 trillion has flowed into U.S. retail deposits, according to October data from Market Rates. This is getting ridiculous as banks offer rates like 2%… 1%… or lower…
Market Rates VP Dan Geller tells American Banker people are viewing deposit accounts an insurance product — the only place you can put money that won’t lose value — and might even start paying to put money there:
The average annual percentage yield offered at the institutions Market Rates Insight monitors have been dropping at a steady clip, down to 0.8%. The average yield on nine-month certificates of deposit is now lower than that offered by a fully liquid money market account. And, Geller said, a growing number have introduced savings accounts with a 1 basis point annual percentage yield.
“It’s a polite way of saying, ‘please, we really don’t want the money,’ ” he said.
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