The U.S. Federal Reserve began steadily raising interest rates one year ago, offering a long-awaited tailwind for bank earnings because lenders can charge borrowers more for loans.
But ask bankers when they will start paying more for the money that savers have in their deposit accounts, and the answer is: not any time soon.
Depositors now have $11.95 trillion at U.S. commercial banks, close to the $11.99 trillion record set in November, according to data from the Federal Reserve Bank of St. Louis. Yet even as the Fed has boosted its target for short-term rates four times, to a current range of 1.25 to 1.5 percent, savers are only earning pennies on every $100 they hold in deposit accounts.
Even rates on one-year certificates do not appear to have moved at the three biggest U.S. consumer banks – JPMorgan Chase & Co, Bank of America Corp and Wells Fargo & Co – according to financial analyst Greg McBride of Bankrate.com, who did spot checks in two competitive urban markets, Los Angeles and Houston.