For more than a year now, big banks have been shafting their customers by refusing to raise interest rates on deposits and products like CDs – opting instead to use the added income to pad their bottom lines after nearly a decade of rock-bottom rates.
This has been great for shareholders, who will indirectly reap the benefits of cheap financing costs and rising profits. Until recently, JP Morgan Chase & Co. had raised its average deposit rate by a paltry 0.21 percentage points, despite the fact that interest rates have risen by 1.25% since the cycle began. A sixth rate hike is widely expected when the Fed meets later this week.
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