Banks in New Jersey, followed by Michigan, Pennsylvania, Virginia and Oregon appear to be dropping deposit rates the fastest.
That's according to research firm Market Rates Insight, which found the reaction time to national trends in deposit pricing varies drastically by state. In the first half of 2010, the national average rate for deposits dropped 0.18%. MRI said it took the New Jersey pricing region only four weeks to drop 0.18% in its average rate for deposits, followed by Michigan at six weeks, Pennsylvania at 13, Virginia 17, and Oregon at 19 weeks. Credit unions were not tracked.
Banks in Illinois, Louisiana, Massachusetts, Wisconsin and Montana were the least likely to drop deposit rates, according to San Anselmo, Calif.-based MRI. These five pricing regions had minimal or no change in their average rate for deposit during the first half of the year despite the decline in the national average.
"These findings are an indication of the diversity of the deposit market," said MRI Executive Vice President Dan Geller. "Clearly, there are advantages to regionalized pricing for deposits, which adapts to the specific conditions in each market."