Monday, March 24, 2014

Report: Wells Fargo, other banks vary interest rates by market

Wells Fargo and two other major U.S. banks pay higher interest rates for savings accounts in some markets than in others, according to a report released Monday.

The report by Wallet Hub examined interest rates at 10 big U.S. banks. It found that Wells Fargo, Capital One Financial Corp. and Citigroup were the only lenders of the 10 that vary interest rates by market.

At San Francisco-based Wells Fargo, which has East Coast headquarters in Charlotte, the three-month promotional interest rate, 0.08 percent, for an account with a $1,000 balance is the same in most of its markets.

But Wells Fargo pays roughly double that in Jacksonville, Fla., and 18 times more in Los Angeles, where the rate is as high as 1.5 percent, the report showed.

A look other Wallet Hub findings:

  • Capital One's 12-month promotional rate for a $1,000 balance is the lowest in New Orleans, at 0.40 percent. It pays double that in New York and Newark, N.J., the markets where its rate is highest.
  • Citibank's standard savings account interest rate is as low as 0.05 percent in Illinois, Maryland and Washington, D.C., on accounts with a $10,000 balance. Citibank's highest rate for the same account is 0.10 percent in Delaware, Massachusetts and Pennsylvania. 
"Most people expect small community banks to operate a bit differently than big national banks. There’s certainly rhyme to that reason, but we also tend to assume those mega-banks offer standardized national rates, regardless of where their customers happen to live. That part, interestingly enough, isn't quite true," Wallet Hub said in issuing the report.

Of the 10 banks, which include Bank of America, the average standard annual percentage rate for a savings account is 0.036 across 50 cities.

Charlotte's rate comes in below that, at 0.025 percent.

The lowest average annual percentage rates can be found in Detroit; Indianapolis; Kansas City, Mo.; Little Rock, Ark.; and Oklahoma City. Rates are highest in Boston; Burlington, Vt.; Houston; and New Orleans.

No regional variation was found in checking account interest rates among any of the banks.

Capital One, Citigroup and Wells Fargo did not immediately provide comment.


Anonymous said...

Wells Fargo and the other big banks are insolvent government banks; who in their right mind would keep an account with a bank which pays only 0.01%. Barclays rate is 0.90% the big banks like Wells Fargo do not have to compete because they are getting cheap money from the government/taxpayer in the form of zirp.