Want the best deposit rate available? Open a new account.

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Online banking customers looking for the highest savings rate offered by their institution may need to open a new account to obtain it.

UFB Direct, a brand of Axos Bank, offers customers who sign up for its new elite savings account an APY of 3.01%. Customers with the bank’s Reward Savings Account, the account advertised as high yield before the elite account was launched last month, received an APY offer of 2.21% when opening accounts in August .

Webster Bank’s online division, known as BrioDirect, is announcing a 2.8% rate on the high yield savings account plus it launched last month. Prior to launching this account, BrioDirect was paying customers with its high yield standard account an APY of 2.15% in July.

Requiring customers to open new accounts to take advantage of the highest available rates could reduce deposit costs at a time when large and frequent Federal Reserve rate hikes have prompted banks to raise rates faster than many are expecting. had planned it.

“Banks can bring in new deposits, new customers, while lowering their overall deposit costs by paying a large number of existing customers old rates,” said Ken Tumin, founder of DepositsAccounts.com, which tracks rates offered at a wide range. banks.

The strategy has been employed by online banks, which have not seen the same increase in deposits as physical banks during the pandemic and generally pay depositors higher rates.

Online banks can pay higher rates on savings accounts than traditional competitors because they don’t have the branch operating expenses.

Creating high-yield savings accounts for new customers isn’t a new strategy, Tumin said. Some lenders used it in the years before the financial crisis, another period of rapid rate increases by the Federal Reserve.

“If the customer doesn’t pay attention to it, they might never notice it,” Tumin said.

It is unclear whether Axos Bank and Webster Bank have informed existing customers that they could qualify for higher rates by opening new savings accounts.

Axos Bank, a San Diego-based unit of Axos Financial, declined to comment on differences in returns between its savings accounts. Webster Bank, a unit of Webster Financial in Stamford, Connecticut, did not immediately respond to requests for comment.

Banks were inundated with deposits soon after the coronavirus hit, adding more than $3 trillion between April 2020 and April 2021. The vast majority of those flows went to big, well-known banks including JPMorgan Chase, Bank of America, Wells Fargo and Citigroup. Online banks received less influx.

Commercial bank deposits have stabilized in recent months as US consumers responded to near-record inflation by increasing spending. U.S. commercial banks held about $17.9 trillion in deposits at the end of September, up from $18.13 earlier this year, according to the Federal Reserve.

Banks were slow to raise interest rates when the Fed raised rates for the first time this year. Even when the increases became more frequent, many consumers stayed put, unaware of the potential high returns available elsewhere or uninterested in the offers. That started to change in July, when the rate of customer switching increased, said Adam Stockton, director of retail deposits at Curinos, a financial services consultancy.

“A lot of banks are saying, ‘We don’t have to be really aggressive to expand today, but we have to be really very thoughtful about trying to keep all the deposits we have,'” Stockton said.

Filing fees should increase when banks will start reporting their third quarter results later this week. Banks have come under particular pressure to pay more to their business customers.

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