[safog]

Why don't larger banks (who presumably have hedged properly) not pay a real interest on deposits at this point? I don't think it's just greed.

The current bank of america / chase interest rate on savings accounts is 0.01%. No rational buyer should accept that when a money market is yielding 5%. People are moving deposits to money markets. That should force the banks to bump up rates.

Maybe they lose more by bumping up rates than they do by keeping them the same and losing deposits but I struggle to see that.

[fnordpiglet]

Because they don’t have to. You deposit there because they’re too big to fail or have such an excellent retail experience or are so brand saturated you don’t make a choice. They are sitting on too much deposits as is, but even without that fact it is purely greed - or, to use another phrasing, it’s the right business decision for maximizing profits. They literally have no reason to improve returns on deposits.

Goldman is trying to buy their way into retail banking and offer very competitive rates. Other more established retail banks are leveraging their size and reputation to maximize profits as they don’t see any upside to increasing rates. They don’t need more deposits, and they won’t lose a meaningful deposit base.

[safog]

> They are sitting on too much deposits as is, but even without that fact it is purely greed - or, to use another phrasing, it’s the right business decision for maximizing profits. They literally have no reason to improve returns on deposits.

Can I look up deposit volume per bank somewhere? I assume even banks will care at some point. 1% probably not, 10% probably yes?