Beware of Banks Bearing High Interest Rates
Post-SVB, smaller banks may launch a bidding war for depositors. That’s fine, as long as no one gets duped.
Looking for a little reassurance.
Photographer: Noah Berger/AFP/Getty ImagesRight now, many bank customers are less concerned with the return on their money than with the return of their money. As such, the biggest financial institutions — which tend to offer low interest rates to savers — are raking in deposits following the collapse of Silicon Valley Bank and Signature Bank.
The uncertainty in the sector is likely to set off a bidding war for savers in which smaller online or regional banks jack up interest rates in an attempt to persuade savers to stay or come back; and could in turn lead some less-ethical players to dupe customers about what they’re really offering. That means regulators and savers both need to use some extra vigilance.