IBJNews

Savings account rates in Indiana among lowest in nation

Back to TopCommentsE-mailPrintBookmark and Share

In Indianapolis, you can find interest rates on savings accounts so low that even Mr. Potter from “It’s a Wonderful Life” might shed a tear for bank customers.

The average savings account in Indianapolis now pays a mere 0.072 percent, according to a survey by GoBankingRates.com.

You read it right: 0.072 percent.

It could be worse. Banks in Indiana’s second-largest city, Fort Wayne, pay an average 0.046 interest on basic savings. 

As a whole, Indiana averaged 0.056 percent—making it fifth-lowest among 50 states and the District of Columbia, according to the survey. Arkansas had the highest average savings return, at 0.204 percent, while North Dakota had the lowest, at 0.035 percent.

In a banking world where you once could earn 5 percent on a savings account, even the country's most generous current rates might seem sub-atomic. Los Angeles-based GoBanking didn’t use an electron microscope, but rather surveyed more than 4,000 financial institutions around the country.

The Indianapolis metro area came in at mid-pack, at No. 55 for highest rate among the nation’s top 100 cities. Fort Wayne was No. 95.

The city with the highest average rate was New Orleans, at 0.216 percent, while the lowest was Lincoln, Neb., at 0.034 percent. 

The second-worst city for savings rates was nearby Cincinnati, ranking No. 99 at 0.037 percent. Cincinnati is home of the some of the biggest banks in the region, including Fifth Third Bank and First Financial Bank.

Rates in any city are determined by numerous factors in the local economy, said Amanda Garcia, an analyst at GoBankingRates.

The intensity of competition among banks in a given market can be one factor, said Michael Renninger, CEO of Renninger  & Associates in Carmel.

Each bank’s management needs to balance the need to attract deposits with loan demand, anticipated deposit run-off, availability of other borrowing alternatives and other liquidity needs, he said.

“For instance, if loan demand is light, the need to attract additional deposits is diminished,” he said.

Other factors include rates being earned by the bank on investments and loans, Renninger said.

“We all know that actions by the Federal Reserve Board have kept [lending] interest rates artificially low. Low rates earned by banks on assets results in lower rates paid by banks for deposits," he said.

But Indiana's dismal ranking among other states makes one wonder why financial institutions pay such low interest rates here in the state.

It could be that banks in the state have comparatively lower loan demand, Renninger said.

GoBankingRates.com Managing Editor Casey Bond noted that the difference in average rates between the highest- and lowest-raking states was pretty miniscule—just 0.169 percent.

"The averages are indicative of the local savings climate and can help depositors determine whether banks are actively encouraging deposits in their area," Bond wrote in the study.

“After years of rock-bottom rates we’re all hoping to see savings account rates rise again,” Bond wrote. “And while we might not get our wish any time soon, some depositors will find that they can eke out slightly higher earnings on savings if they live in the right place.”

ADVERTISEMENT

  • Ditch your local bank (at least for savings)
    Online, FDIC-insured banks pay 10+ times the amount that local banks pay. Yes, the rates are not great historically speaking, but they're way better than want local banks are paying. Current savings rate examples: Ally Bank 0.85%, GE Capital Bank 0.90%. No fees, no minimums (I sound like a bank salesman!). Check for yourself: https://origin.bankrate.com/funnel/savings/savings-results.aspx?local=false?s=33

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Good Day I am Mr (Victoria Wright) from United state of America, i stayed in NEW YORK, and i have a broke up business, until i found this company email who help me to gain a loan for business,, and now i want to used this short medium to congratulate the below company for the fast and safe money they loan to me without any form of collateral, i loan 500,000USD from the company to save my business and lots more, i saw their mail on the internet, everyone always give testimony for what they did, so i quickly contacted them and they all did everything for me without stress and my money was sent to my account just 3 days later, i was surprise and i feel so glad, now i have a standard business control agent who help me, now i will advice those who need urgent loan to contact him at the bellow email:zenithfirm12@gmail.com

  2. NOTICE:This is to inform the general public that Vampires are real. My name is James Franklyn.,am an agent of vampire,am here to introduce our new world trend to you,a world of vampire where life get easier,we have made so many persons vampires and have turned them rich,you will be assured long life and prosperity,you shall be made to be very sensitive to mental alertness,stronger and also very fast,you will not be restricted to walking at night only even at the very middle of broad day light you will be made to walk.In case you are wildly oppressed by some unscrupulous persons we can still help you fight them.Your protection is assured immediately you join.Just contact the bellow email if you are interested we are here to attend to you anytime you want us. Contact the bellow email for more details. Email:vampirescreed@hotmail.com Sincerely: James Franklyn.

  3. Bravo! Someone else that is willing to speak the truth! Bravo!_____NBCSN is available in almost 2 MILLION more homes than just a few years ago, but Indycar STILL gets less total viewers than it did just a few years ago when NBC took over Versus. Attendance and ratings cratered with the end of season races (just when the title battle got "interesting" HAH!__________And now...new race in Basilia, where Miles celebrated the "rich history" of Indycar racing there. Rich history? What, 7 events in the 100 years of AOW? Yep, some history. Well, at least its an oval. It's not??? Are you kidding me??? Gosh darn road racin furriners.

  4. PURITY RAY LOAN OFFER........ Have you been denied by your banks,or are you in need of of an urgent loan to pay of your bills we are capable of giving loans @ cheaper rate to interested individuals, student, companies and members of the public in need of finance to settle bills, we do offer considerable loans which you can count on. For more information on our various types of loan,then you will have to contact PURITY RAY LOAN FIRM, to help you achieve your desire LOAN APPLICATION FORM TO BE FILLED BORROWERS INFORMATION * Full name:………………………. * SEX * ……………………………. * Country………………………….. * State:……………………………. * Land:…………………………….. * Occupation:…………………….. * phone number:…………………. * Telephone: ………………………….. * Age:………………………………. * Amount needed as loan:……… * Loan Duration:………………….. * Propose of Loan:……………….. * Annual revenue:………………… * Monthly Income:……………….. * Guarantee:………………………. * Payment: monthly or annually Email.....purityrayloanfirm@gmail.com Thank you and God bless Mr Purity Ray PURITY RAY LOAN FIRM we tend to serve you better

  5. Problem: most of the people responding to this article don't know about this service AT ALL! Why? Lack of awareness. This isn't IndyGo. This is CIRTA: might as well be the mattress company because they are asleep at the wheel - something like 3 directors over the last year? Playing with federal grant money is great! This "region" wants commuter rail service, has spent MILLIONS on Transportation studies yet can't even support a commuter bus line? This is largely for suburban riders to get to downtown - not for "service people to work in our hotels and restaurants" ! Get your head out of your backside!! These are professionals, students etc. that don't want to fight traffic, save some money on parking, gas, stress.... if CIRTA would put their federal money into widely promoting the sevive to Greenwood, Fishers & Carmel instead of finding directors and studies - this would be a successful service. Our family uses(d) it daily for the last several years - but the recent uncertainty & now unreliability due to cuts from Carmel has been a problem. Now, costs us an additional $350/month for gas & parking ( $4200/year) plus vehicle wear, service, environmental impact ... YES - this REGION needs this this type of service in order to keep growing and getting the people it needs to fill skilled positions in downtown Indianapolis. Think outside of your own car !!!

ADVERTISEMENT