BestCashCow research has shown that smaller banks tend to offer CD rates that are on average .40 - .60 percentage points better than larger banks, while online banks tend to offer savings rates that are on average 0.60 percent better than non-online banks. To see how much potential consumers have to save more by switching accounts, BestCashCow examined the deposit patterns of savers across the country and in each state. The survey showed that despite this fact, consumers across the country have a majority of their money in big banks and offline banks and that trend is only increasing.
The largest banks >$100 billion in deposits have increased their consumer deposit share from 36% before financial crash to 43% today. Larger banks are getting larger while smaller banks are getting smaller or closing. This despite the fact that smaller banks offer better deposit rates. At the same time, Internet banks hold only 6% of total consumer deposits, depsite having some of the best savings rates.
Deposit Share by Size:
|
Category |
2007 Share |
2012 Share |
|
< $1 billion |
26% |
23% |
|
>$1 billion < $10 billion |
18% |
17% |
|
> $10 billion |
56% |
59% |
|
> $ 100 billion |
36% |
43% |
States with the Most Deposit Potential
On a statewide basis in 2012, 66% of AZ’s deposits, 64% of Florida’s, and 61% of CA’s deposits are held by mega-banks. As BestCashCow research has demonstrated, large banks (>$10 billion in deposits), have lower rates than smaller banks (<%1 billion in deposits). Consumers in these states would benefit the most from shifting some of their deposits, especially CDs to smaller, community banks.
|
|
>100 billion |
> 10 billion |
< 1 billion |
<10 billion > 1 billion |
|
AK |
46% |
57% |
13% |
30% |
|
AL |
40% |
53% |
32% |
14% |
|
AR |
12% |
29% |
45% |
27% |
|
AZ |
66% |
81% |
6% |
12% |
|
CA |
61% |
80% |
8% |
12% |
|
CO |
36% |
61% |
22% |
18% |
|
CT |
39% |
73% |
15% |
12% |
|
DC |
81% |
83% |
12% |
5% |
|
DE |
46% |
71% |
14% |
15% |
|
FL |
64% |
74% |
13% |
13% |
|
GA |
49% |
56% |
27% |
17% |
|
HI |
0% |
57% |
6% |
37% |
|
IA |
17% |
19% |
65% |
16% |
|
ID |
44% |
60% |
24% |
16% |
|
IL |
33% |
45% |
34% |
20% |
|
IN |
30% |
38% |
27% |
34% |
|
KS |
9% |
19% |
57% |
24% |
|
KY |
32% |
33% |
44% |
23% |
|
LA |
37% |
53% |
39% |
8% |
|
MA |
36% |
48% |
23% |
29% |
|
MD |
58% |
72% |
20% |
8% |
|
ME |
23% |
35% |
42% |
23% |
|
MI |
43% |
67% |
19% |
15% |
|
MN |
29% |
39% |
50% |
11% |
|
MO |
21% |
36% |
46% |
18% |
|
MS |
15% |
27% |
40% |
32% |
|
MT |
19% |
19% |
40% |
41% |
|
NC |
57% |
67% |
16% |
17% |
|
ND |
17% |
19% |
55% |
26% |
|
NE |
11% |
21% |
56% |
23% |
|
NH |
49% |
60% |
29% |
11% |
|
NJ |
51% |
72% |
11% |
16% |
|
NM |
36% |
52% |
44% |
5% |
|
NV |
66% |
72% |
7% |
21% |
|
NY |
56% |
77% |
9% |
14% |
|
OH |
39% |
65% |
21% |
14% |
|
OK |
6% |
20% |
50% |
30% |
|
OR |
52% |
72% |
11% |
16% |
|
PA |
30% |
57% |
21% |
22% |
|
RI |
51% |
66% |
14% |
21% |
|
SC |
44% |
49% |
26% |
25% |
|
SD |
19% |
21% |
51% |
29% |
|
TN |
33% |
44% |
40% |
16% |
|
TX |
38% |
55% |
28% |
17% |
|
UT |
36% |
70% |
28% |
2% |
|
VA |
58% |
60% |
18% |
22% |
|
VT |
0% |
52% |
28% |
20% |
|
WA |
48% |
64% |
13% |
24% |
|
WI |
14% |
39% |
46% |
16% |
|
WV |
23% |
31% |
36% |
33% |
|
WY |
19% |
26% |
49% |
26% |
States Where Consumers Are Best Maximizing Their Deposit Dollars
IA, NE, and ND have 65%, 56%, and 55% of their deposit dollars in banks with assets under $1 billion. Consumers in these states are best maximizing their deposit dollars based on bank size according to BestCashCow research.
Key Takeaways:
- Only 6% of deposits are in online banks, which offer significantly higher savings rates. A large percentage of consumers could benefit by shifting some of their bank savings into online savings accounts. BestCashCow research has also shown that online savings rates have held up better than non-online CD or savings rates over the last year. Consumers should consider looking to online banks to boost yield.
- Consumers across all states should consider shifting interest bearing money (especially CDs) from big banks to community banks in order to take advantage of the higher yield. In some states like AZ, and CA, significant money is being left on the table based just on the size bank consumers are choosing.
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