There is some brutal competition for retail deposits right now and I think the banks are getting sophisticated about balancing interest rates and consumers’ who satisfice versus those who optimize. They can probably afford to lose the latter.
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The interest rate “game” is more of a gimmick…isn’t it? As soon as the federal interest rates drop banks will be forced to follow suit. Marketing stunt to me, in the very least.
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The fed funds rate doesn't set the interest rate at banks, it just influences it. They have wide (probably 100 bps or more) interest margins even for premium savings accounts; the big question is who bids how much to get accounts and how stable those deposits/bids are.
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