Rising Bank Rates and Nationwide Failures: Implications for Personal Loans and Small Businesses

The recent crisis at Silicon Valley Bank has led to some banks increasing their savings account and CD rates to incentivize customers to stay put or to attract new money to replenish reserves. Some online banks, in particular, have increased deposit rates because it’s easier for their customers to move money to competitors. The effect of the crisis on savings rates can be difficult to isolate because bank interest rates were already climbing significantly in the past year as the Fed has hiked its key short-term rate by 4.75 percentage points to fight inflation.