A New York Community Bank in Brooklyn offers the country’s highest interest rate for a savings account at 5.55%, according to analyst Ken Tumin. The bank faced funding pressure and underwent a capital injection in March. NYCB’s CEO changed before the rate increase. Despite the turnaround plan, the bank’s shares are down more than 68% year to date. Other banks offering rates over 5% tend to be newer or smaller players. Established banks like American Express, Goldman Sachs, and Ally have dropped rates. Customer deposits at My Banking Direct are insured by the FDIC up to $250,000. Savings account rates have been rising in the past two years with smaller banks forced to pay higher rates for deposits compared to larger ones.
Reference:
https://www.cnbc.com/quotes/NYCB/
https://www.cnbc.com/2024/03/01/wall-street-worries-about-nycbs-loan-losses-and-deposit-levels.html
https://www.cnbc.com/2024/03/06/new-york-community-bancorp-tumbles-40percent-and-is-halted-as-troubled-bank-reportedly-seeking-cash-infusion.html
https://www.cnbc.com/2017/06/05/white-house-plans-to-nominate-otting-for-comptroller-of-the-currency.html
https://www.cnbc.com/quotes/AXP/
https://www.cnbc.com/quotes/GS/
https://www.cnbc.com/quotes/ALLY/
https://www.cnbc.com/quotes/JPM/
https://www.cnbc.com/2023/03/10/silicon-valley-bank-collapse-how-it-happened.html
https://www.cnbc.com/2023/05/01/first-republic-bank-failure.html
New York Community Bank, a regional lender that recently required a $1 billion lifeline, is offering the country’s highest interest rate for a savings account at 5.55% through its online arm, My Banking Direct. This aggressive rate may indicate that the bank is facing funding pressure due to losses on commercial real estate loans. Despite recent management changes and a capital injection, NYCB’s stock price has fallen significantly. Other banks offering rates higher than 5% tend to be newer or smaller players. Established banks have an average high-yield savings rate of about 4.4%. Customer deposits at My Banking Direct are insured by the FDIC. Smaller banks have been forced to pay higher rates for deposits in order to compete with larger institutions. Rising savings account rates have been a trend over the past two years in the wake of regional banking crises.
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