Greater Baltimore banks are battling for deposits. What that means for your wallet.

Baltimore Business Journal 09/25/18

The battle for deposits is heating up, and that could mean more money in your pocket if you open up a new account at the right bank.

Interest rates are rising because of actions taken by the Federal Reserve, setting off a deposit war among banks looking to make more money on their spreads. In the Greater Baltimore market, where local bank executives say the competition was already fierce, the war is intensifying.

Banks are pulling out all the stops and in some cases offering cash bonuses to customers who open new checking accounts.

"We haven't had an environment like this since 2008," said Drew McKone, director of branch distribution at Howard Bank.

Bank of America, Greater Baltimore's biggest bank with $21.3 billion in local deposits, is currently offering bonuses of up to $300 for customers who open certain checking accounts. The Charlotte, North Carolina-based bank is also increasing the interest rate for some of its savings accounts.

The investment side of Bank of America's business is also offering special deals. A promotion through the bank's Merrill Edge offers customers who invest in a new account bonuses of up to $600. Preferred Rewards clients can get bonuses of up to $900.

Bank of America has been taking market share away from some of its biggest competitors in the local market. The bank's 29.4 percent market share as of June 30 is up from 27.9 percent at the same time a year ago.

The next-closest competitor, M&T Bank, saw its market share fall from 21.6 percent to 19.2 percent. As the biggest corporate sponsor of the Baltimore Ravens, M&T Bank launched a marketing campaign at the beginning of football season to capitalize on fan excitement.

Those who open one of M&T Bank's no-fees EZChoice checking accounts can get a $100 bonus. Certain checking accounts provide up to a $250 cash bonus. As of Sept. 6, M&T Bank also began providing all-in-one mini-coolers and grills to new customers.

"At our core we are a community-focused bank," said Augie Chiasera, president of the Greater Baltimore and Chesapeake region for M&T Bank. "We are focused on the depository needs of our customers...It's curious that competitors are focusing on an area that has always been central to us."

PNC Bank also has offers for as much as $300 for opening a new checking account.

Baltimore-based Howard Bank does not offer cash bonuses. Recently, however, the bank conducted a four-week campaign centered around certificates of deposits. The bank raised the interests for its certificates of deposits. It also offered "bump-up" options for the accounts, so that if the Federal Reserve raises rates the clients can have the flexibility to take advantage.

The bank wanted to take advantage of the opportunity to lock in deposits now so it could have more money on its balance sheet available for lending, McKone said.

"Now was the time to lock in these deposits," he said. "We wanted to go big so we would not continually have to be in the market. We don't want to be a CD-oriented bank. We are relationship-oriented and now we can develop those relationships with small business owners and employees."

Howard Bank does not have any plans for additional campaigns.

Hamilton Bank CEO Bob DeAlmeida said his institution is not offering cash discounts. Like Howard, the bank has raised some of the rates for its money market accounts and certificates of deposits.

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