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Banks Raise Rates In Effort To Reduce Churn

This Month in Retail Banking

The Fed slowed its pace of rate increases in December, but banks are charging ahead with higher rates. 

The latest issue of the Curinos CDA Consumer Executive Summary found that banks are increasingly trying to slow runoff from rate-seeking customers by raising rates of their own. 

Posted rates are notably higher, with 19% of banks now posting a savings/MMDA rate above 2.00% compared with 3% in September. (See Figure 1.) 

Figure 1:
Distribution of Savings Acquisition Rates | Jan ‘22 – Jan ’23*

% of branch banks offering a savings/MMA product of at least the following rates​

Source: Curinos Standard Rate Data, includes 1,349 banks as of Jan 4, ’23*. Excludes online banks.​

In addition, 46% of banks are offering a CD rate above 3.00% and 18% are offering more than 4.00%. (See Figure 2.) 

Figure 2:
Distribution of CD Acquisition Rates | Jan ‘22 – Jan ’23*​

% of banks offering a <24 month CD of at least the following rates​

Source: Curinos Standard Rate Data, includes 1,349 banks as of Jan 4, ’23*​

Despite the higher rates, savings runoff is continuing. It appears, though, that the market is increasingly bifurcating between lower runoff (averaging 1-2%) and higher runoff (averaging 10-13%).  Rate-based churn remains concentrated in higher-balance tiers, with switch to CDs disproportionately coming from balances in excess of $100,000. 

Internet banks continue to lead the market, with the average of the top 10 savings rates peaking at 3.69% and one-year CDs reaching 4.38%. 

  • Author
    • Adam Stockton

      Adam is a Managing Director who leads the Retail Deposit & Lending businesses at Curinos. He has spent more than 18 years advising financial services companies on growth and profitability strategies, focused on product management, growth, profitability and pricing. Clients include a majority of the top 25 US banks, a number of the largest banks in Canada and Australia, brokerages, Credit Unions, direct banks and fintechs.​ Adam’s work leads to actionable, sustainable strategies that help clients grow economically through the application of granular analytics, purpose-built tools and proprietary benchmark data. He regularly publishes and speaks, particularly topics relating to product profitability and growth.​ His teams are responsible for Curinos’ Retail Deposit Optimizer product management and price optimization platform; Deposit Analyzer benchmarking products for Consumer, Wealth and Small Business deposits; LendersBenchmark Analyzers for Small Business Unsecured Lending; rate and fee data for Consumer and Small Business; and strategic consulting practices across the Retail areas. ​

      View all posts Managing Director, Retail Deposits and Lending
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