Which State Has the Highest Deposit Rates?
Southern state pays the most on deposits, while a Midwestern state is the least generous.
At year-end 2012, the state with the highest average rate on deposits was Louisiana, at 0.51%, whereas Ohio has the lowest (0.24%), according to analysis from Market Rates Insight. The national average of all the states is 0.35%.
This analysis also shows that Kentucky experienced the greatest decline in the average rate for deposits during 2012, down 0.21%, and the District of Columbia experienced the least drop in rates—down 0.02% during the year.
Nationally, the average rate on deposits dropped 0.11%.
Rounding out the top five states with the highest average deposit rates are Texas (0.49%), Iowa (0.45%), Nebraska (0.45%), and Virginia (0.44%).
In addition to Ohio, states at the lowest end of scale include West Virginia (0.25%), Indiana (0.26%), Michigan (0.27%), and New Hampshire (0.27%).
“Higher interest rates on deposits are an indication of greater economic activity in the state,” says Dan Geller, Ph.D., executive vice president at Market Rates Insight. “It means that in states with relatively higher interest rates on deposits, banks and credit unions are competing for liquidity to fund higher demand for loans.”