SAN ANSELMO, Calif. – National average rates paid on deposits dropped 0.06% beyond the “normalized pattern” in the week following enactment of Reg E on July 1, according to new analysis from Market Rates Insight (MRI).
“Normally, such as in the past six months, the average decline in the national average rate for deposits was about 0.01% every two weeks,” the company said in its analysis. “The drop in the interest rates was heavier in long-term CDs, such as 48 and 60 months, which dropped 0.13% and 0.07% respectively. The 30-month CD dropped 0.05%, the 36-month CD dropped 0.03%, and the 24-month CD dropped 0.02%.”
Dan Geller, EVP with MRI, added, “The timing of Reg. E works in favor of the banks. Analysis shows that deposit balances are growing despite historically-low rates, due mostly to the stock market volatility and uncertainty. This means that banks can make up some of the revenue loss from fees by reducing expenses on deposit interest rates.”
