From CNBC: 2024-04-10 06:00:01

New York Community Bank offers the nation’s highest interest rate for a savings account at 5.55%, possibly due to funding pressure. After facing loan loss concerns, the bank received a $1 billion-plus lifeline led by Steven Mnuchin’s Liberty Strategic Capital. NYCB saw a 7% drop in deposits before the capital injection.

NYCB’s new CEO, Joseph Otting, took over as the bank announced the highest interest rate for savings accounts. Despite trading at under $4 per share, NYCB’s rate outshines established banks which average around 4.4%. Customer deposits at My Banking Direct are FDIC-insured up to $250,000.

Savings account rates have been rising for the past two years, with smaller banks competing by offering higher rates than larger institutions. The need for higher rates signals a deposit problem, forcing banks to offer attractive rates to retain customers amidst stiff competition. Smaller banks like NYCB face pressure to maintain their deposit levels.

Read more: NYCB is paying the nation’s highest interest rate (APY)