Traditional savings accounts may no longer suffice to attract deposits. Banks should develop innovative products such as high-yield savings accounts, tiered interest rates, and goal-based savings plans. Also, introducing flexibility in terms of withdrawal options and deposit schedules can make these products more appealing to a broader audience.
Successful traditional banks are deploying several strategies to increase deposits: Become an indispensable assistant. Banks that hold a customer’s checking account can scan transactions to spot duplicate charges, opportunities for the customer to earn rewards, and avoid fees.
Here are ways in which traditional and “digital-only” banks are increasing deposits. Traditional bank strategies to increase deposits: Traditional banks maintain branches as well as digital banking and offer a range of products and advice. Successful traditional banks are deploying several strategies to increase deposits:
Banks grow by growing deposits so they can make more loans. Today, interest rates are historically high and staying there. These “higher-for-longer” rates make growing deposits especially challenging: Even as banks raise the rates they pay, they find it hard even to keep the deposits they hold now.
So, it just costs them more to raise deposits. Lastly, that incremental loan growth out there has to be funded by deposits. As banks are looking to increase their balance sheets on the loan side, they’ve created a need for additional deposits, as well. Attracting Deposits Via … Branch Expansion?
For several months, banks and credit unions have been feeling pressure to attract and retain deposits. A rapid increase in interest rates has led to more deposit outflows – a reversal from previous years, when the challenge was more about finding ways to put large amounts of liquidity to productive use.