JPMorgan Chase plans to raise deposit rates for most large clients next month, becoming one of the first banks to do so since the Federal Reserve hiked interest rates earlier this month.
Sources told CNBC that interest rates would rise on operating deposits held in dollars, but did not specify by how much.
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, raised its prime rate, a benchmark for many loans, after the central bank’s decision.
The Wall Street Journal first reported on the deposit rate change, noting that some of JPMorgan’s large rivals — Bank of America, Wells Fargo and Citigroup — had not yet revised their deposit rates, which affect the interest they pay to depositors.
Years of easy interest rate policy had hit banks’ net interest margins, which is 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 room to rebuild this key margin.