American banks are currently raising their savings rates to keep customers from running due to jitters following the collapse of Silicon Valley Bank (SVB) and Signature Bank.
The ongoing crisis in the banking industry is pushing lenders to offer more perks for customers, USA Today reported.
Many depositors have been transferring their money from regional banks to larger ones, forcing smaller banks to raise their savings account and CD rates to retain customers or to attract new accounts to replenish reserves, analysts say.
The failure of SVB occurred when confidence in the bank’s financial health led uninsured customers whose deposits were larger than Federal Deposit Insurance Corp.’s $250,000 limit to shift their money to bigger banks with more stable assets, leading to a bank run….