New Report from Market Rates Insight Reveals Bank Depositors Seek Holding Pattern with 12-month CDs Until the Economy Recovers
Frequent Re-pricing of Special 12-month CD, and its relatively high interest rate indicate that depositors are opting for a one-year of “wait and see” before deciding on other investment avenues.
San Anselmo, CA, April 24, 2009 --(PR.com)-- A new report by Market Rates Insight (MRI, www.marketratesinsight.com) shows that 12-month Special CDs have been the most popular banking products among depositors since the beginning of this year.
MRI’s latest National Pricing Indicator (NPI) weekly report reveals that the 12-month Special CD was re-priced three times more often than the average for all other CDs. On average, the 12-month Special CD was re-priced every four days since January, whereas the average for all other CDs was 12 days. The report also indicates that the average interest rate paid on the 12-month Special CD (2.28%) has remained higher than the average interest rate paid on all other CDs (1.99%) even for longer terms such as five-year CDs.
“Banks and credit unions are very tuned-in to the market and to the needs of their depositors,” said Dr. Dan Geller, Executive Vice President of Market Rates Insight. “If, as the analysis points out, they re-priced their 12-month Special CD every four days, and kept the interest rate relatively high, it shows that there has been high demand for this deposit product, and therefore banks and credit unions are competing for this business.”
Dr. Geller adds that with the current stock market volatility, investors are turning to short-term, insured investment options like CDs to protect their money and wait out the economic storm. The Special 12-month CD category seems to be gaining the most attention because it offers an attractive return within a year, which seems to suit depositors’ comfort and commitment level. This behavior on the part of depositors indicates that they are planning for a one-year of low-yield but safe place for their money with the hope that when the economy improves, they can move their money to higher yield investment such as stocks.
Market Rates Insight offers weekly Pricing Indicator reports for CDs, checking, savings, money markets, and other types of deposit and loan products. For a copy of the report, send a request to info@marketratesinsight.com.
About Market Rates Insight
For more than two decades, Market Rates Insight (MRI) has been helping subscribers price with precision by providing banks, thrifts, credit unions, and other financial institutions with accurate market intelligence on deposits, loans, and fees. MRI uses deposit surveys, mortgage and consumer loan surveys, fee and feature studies, scanned ads, new product alerts, and market share and money fund reports to give subscribers the intelligence they need to profitably react to emerging trends. MRI’s products include customized, web-enabled market research tools that report on rates, as well as online searchable databases, gauges, alerts, and dashboards that aggregate key client data to provide real-time views on how they stack up against market competitors.
Market Rates Insight is located in San Anselmo, California. For more information, see www.marketratesinsight.com.
Contact:
Dr. Dan Geller
Market Rates Insight
415-448-8813
Dan.Geller@MarketRatesInsight.com
Tom Woolf
Market Rates Insight
(415) 259-5638
tom.woolf@marketratesinsight.com
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MRI’s latest National Pricing Indicator (NPI) weekly report reveals that the 12-month Special CD was re-priced three times more often than the average for all other CDs. On average, the 12-month Special CD was re-priced every four days since January, whereas the average for all other CDs was 12 days. The report also indicates that the average interest rate paid on the 12-month Special CD (2.28%) has remained higher than the average interest rate paid on all other CDs (1.99%) even for longer terms such as five-year CDs.
“Banks and credit unions are very tuned-in to the market and to the needs of their depositors,” said Dr. Dan Geller, Executive Vice President of Market Rates Insight. “If, as the analysis points out, they re-priced their 12-month Special CD every four days, and kept the interest rate relatively high, it shows that there has been high demand for this deposit product, and therefore banks and credit unions are competing for this business.”
Dr. Geller adds that with the current stock market volatility, investors are turning to short-term, insured investment options like CDs to protect their money and wait out the economic storm. The Special 12-month CD category seems to be gaining the most attention because it offers an attractive return within a year, which seems to suit depositors’ comfort and commitment level. This behavior on the part of depositors indicates that they are planning for a one-year of low-yield but safe place for their money with the hope that when the economy improves, they can move their money to higher yield investment such as stocks.
Market Rates Insight offers weekly Pricing Indicator reports for CDs, checking, savings, money markets, and other types of deposit and loan products. For a copy of the report, send a request to info@marketratesinsight.com.
About Market Rates Insight
For more than two decades, Market Rates Insight (MRI) has been helping subscribers price with precision by providing banks, thrifts, credit unions, and other financial institutions with accurate market intelligence on deposits, loans, and fees. MRI uses deposit surveys, mortgage and consumer loan surveys, fee and feature studies, scanned ads, new product alerts, and market share and money fund reports to give subscribers the intelligence they need to profitably react to emerging trends. MRI’s products include customized, web-enabled market research tools that report on rates, as well as online searchable databases, gauges, alerts, and dashboards that aggregate key client data to provide real-time views on how they stack up against market competitors.
Market Rates Insight is located in San Anselmo, California. For more information, see www.marketratesinsight.com.
Contact:
Dr. Dan Geller
Market Rates Insight
415-448-8813
Dan.Geller@MarketRatesInsight.com
Tom Woolf
Market Rates Insight
(415) 259-5638
tom.woolf@marketratesinsight.com
###
Contact
Market Rates Insight
Tom Woolf
415-259-56t38
www.marketratesinsight.com/new
Tom Woolf
415-259-56t38
www.marketratesinsight.com/new
Contact
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