(NEW YORK) JPMorgan Chase plans to raise deposit rates for some large clients next month, becoming one of the first banks to do so since the Federal Reserve hiked interest rates, The Wall Street Journal reported Monday, citing a source.
The Fed voted earlier this month to increase its benchmark federal funds rate for the first time in nearly a decade. JPMorgan, the largest U.S. bank by assets, already raised its prime rate, a benchmark for many loans, after the central bank’s decision.
The deposit rate change will apply to “most institutional clients,” but the size of the moves will vary, the report said. The newspaper added that some of JPMorgan’s large rivals — Bank of America, Wells Fargoand Citigroup — have not yet revised their deposit rates, which affect the interest they pay to depositors.
he increase will likely affect “operating” deposits, which are seen as less likely to be withdrawn during a crisis, the report said.
Years of easy interest rate policy had hit net interest margins, the difference between income generated from interest on loans and other investments and interest paid to depositors. Raising the prime rate, but not the deposit rate, would give banks some extra breathing room.
A JPMorgan spokesman did not immediately respond to a request for comment.