As the Federal Reserve increased interest rates, customers cried out for banks to pay more for deposits. Analysts now claim that lenders appear to be changing their incentives in an effort to keep consumers’ cash parked in their accounts for a longer period of time after the financial crisis rattled markets last month.
American banks are enticing depositors with signing bonuses in exchange for new account openings or recurring deposits of funds. The discounts are taking place at a time when clients are nervous following the bankruptcies of Silicon Valley Bank (SVB) and Signature Bank last month, which led them to withdraw $119 billion from smaller institutions.
Nonetheless, according to figures from the Fed, deposits at smaller banks fell by around $216 billion for the week ending March. Meanwhile, large U.S. banks lost out on $96.2 billion in deposits in the week ending March 22, the Fed data showed. Deposits at large banks dropped some $519 billion from as high as $11.2 trillion in February last year.