Taking a shot at nonbank competition, banks are aggressively raising the annual percentage yields on money market deposit accounts.

As a result, assets in the banks' alternatives to money market mutual funds rose 21% over the past year, to $705.7 billion. Short-term certificates of deposit were up 12% in that time; passbook savings, only 7%, according to data compiled by the Federal Reserve.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.