Bank deposit rates are the highest in a decade and a half. That’s good news for savers, but bad news for lenders as they prepare to release their second-quarter results.
US banks spent the last several months competing with each other to keep or bring back depositors following the turmoil that took down three sizable regional institutions and triggered outflows across the banking system.
That scramble pushed rates on savings accounts to 5.05% at the end of the second quarter, according to Bankrate, their steepest level since February 2008.
The challenge for banks across the US is that these higher funding costs are eating into a key measure of profitability known as net interest margin, which measures the difference between what lenders make from their loans and what they pay for their deposits.
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