Tuesday, October 22, 2019

Think Again, Banks Beat CUs on Deposit Rates

The Credit Union Journal is reporting that analysis of industry data shows that credit unions do not pay the best rates on deposits.

According to an analysis by The Kafafian Group, the median cost of interest bearing liabilities at banks with between $1 billion and $10 billion in assets were 1.25 percent versus 95 basis points for comparable sized credit unions.

In addition, another analysis of deposit rates in 15 metropolitan areas found that banks are paying more than credit unions for deposits.

These findings contradict the assumption that credit unions offer better deposit rates than other financial institutions.

The article provides some explanations for this, including regulatory changes making core deposits more attractive at the largest of banks.

Read the article (subscription may be required).
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