Most traditional U.S. banks have been slow to raise rates, but the wealthiest customers are already demanding and receiving more yield. After all, they are the customers whose checking accounts remain stuffed even as other Americans feel the pain of inflation.
They also are sophisticated enough to gravitate toward other financial products where they can receive better rates.
The challenge for institutions will be analyzing the value of these customers, what it will take to retain them and how to get an even larger share of their wallets.
Checking account growth remains elevated for wealth customers even as consumer growth has slowed.
Consumer savings/MMDA rates haven’t yet increased and are likely to continue to lag higher Fed rates, but…
…we are already seeing early signs of competition in wealth. High-balances customers are expecting (and receiving!) exception rates.
