Bank Account Deposit Rates
Savings accounts deposit rates in the United States are still at all time lows due to a weak economy. The percent annual rates are all under 2% and gravitate toward the lower end at 0.25 percent or lower. HSBC bank has a rate of 0.80 percent as of August 2011; whereas Wells Fargo offers 0.25 percent, Bank of China USA offers .15 percent for September 2011; and Bank of America offers 0.05 percent. These rates are abysmally low because they reflect the current tenuous nature of American banks.
Data from the Federal Reserve Bank of Minneapolis, the Ninth District of the Federal Reserve, notes that although there has been stabilization in nonperforming assets, charge-offs have experienced a slight increase during the second quarter of 2011. In the construction industries, commercial real estate and land development sectors, loans show a high degree of nonperformance. These are loans that are 90 days overdue.
Throughout 2010, banks sought to reduce leading in commercial real estate that covered multifamily residential properties. Agricultural loans have performed best.
Reports from the Federal Reserve Beige Book acknowledged a slowing down of the economy during the second quarter 2011. Residential construction was characterized as depressed. Existing homes are experiencing further declines in prices as distressed sales continue to weigh the housing market. Rental markets are showing some strength.
Recent news on the banking industry indicates punitive measures taken by the federal government to correct billions of dollars in losses the banks had caused by selling Fannie Mae and Freddie Mac toxic mortgage-backed securities. Major banks among the 17 that were sued were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.
The federal suit would seem to compound the forthcoming settlement which the banks will have to make from the nation’s state attorneys general. The settlement, proposed in the billions, anchors a poor picture of the banking industry recovering from its own mortgage meltdown crisis. The picture is reflected in the current problems faced by Bank of America. Warren Buffett recently lent B.A. $5 billion as a show of confidence. The loan followed the bank’s massive reported loss of $8.83 billion for the second quarter of 2011.
B.A. remains mired in suits from citizens, states and companies for its role in the housing mortgage crisis. A.I.G., one of the largest insurance companies who suffered greatly in the mortgage crisis, recently sued the bank for $10 for toxic mortgages it had bought from B.A.
To this date, Federal Reserve interest rates to banks have stayed at 0 percent to 0.25 percent. For fear of slowing down liquidity in the monetary market, the Fed has not increased interest rates, hoping that low rates would increase borrowing. While the prime rate is 3.25 percent, the savings deposits return rate seems to reflect the lower Fed rate. Consumers would make no more than the Fed rate at which banks lend to each other to meet reserve requirements. This is one reflection of the low savings accounts interest rates.