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Although there is some uneasiness due to the volatility of the banking sector, banks continue to see growth in deposits for checking accounts.
To encourage that growth, some banks are offering bonuses depending on the amount deposited. Citibank may offer bonuses of $200 to $2,000; PNC Bank may offer from $50 to $400; Chase Bank may offer $200, according to Fortune, as of May 12.
In a February survey by Forbes Advisor, 73% of respondents said that the most important feature when shopping for a checking account is that it had no monthly fees, 47% said their most important feature is to have branch access, 36% said they valued nationwide availability of ATMs, and 26% said rewards and cashback was the most important feature.
“There has been a flight to quality, and people are looking for safe and secure banks where they can keep their money,” said Calixto Garcia-Velez, president and CEO of Banesco USA. “We’ve actually benefited from that, and we’ve seen a pretty significant increase in deposits.”
There have been concerns in the industry about money leaving checking accounts as people are transferring them into money markets or certificates of deposit (CD), where they could have a higher rate of return.
Interest in checking accounts has historically yielded the lowest interest rate. As of Feb. 21, the average rate was 0.06% annual percentage yield (APY). According to the Federal Deposit Insurance Corporation, the average savings account is earning 0.39% APY, and some promotional CDs are yielding over 5%, the highest it has been in several years.
But what’s happening in the banking world when it comes to checking accounts, Mr. Garcia-Velez said, is that online banking and mobile banking are the centerpiece.
“People are not looking for that physical footprint,” he said. “They are putting more value on who’s got the best technology. The physical footprint is no longer a major driver, like it used to be in the past. Banks have had competition with pure-online banks and non-bank entities that are now offering financial services products.”
https://www.miamitodaynews.com/2023/05/16/checking-deposits-grow-as-some-banks-offer-bonuses/
