Last year I blogged about the changing dynamics around the value of public deposits and the need to pursue higher rates. This topic once again surfaced in a Wall Street Journal article* two weeks ago about how wealthier bank clients are asking for and receiving higher deposit rates on their cash. The authors noted that valued, savvy clients could expect higher rates on their cash if only they asked.

You Will Need To Ask…


As the Federal Reserve has increased short-term interest rates, banks have been quick to raise rates on loans but very slow in raising deposit rates. This is especially true on public deposits given their collateral and legal requirements.

The value on deposits has increased for financial institutions over the last 18 months. Though the net interest margin all deposits has become more attractive, however, in order to receive the benefit of that increase one must provide solid information to make the case.

Having worked in the world of government, healthcare, and higher Ed banking for many years, I can assure you the more information you provide bank execs on the value, flow, and commitment of your cash deposits the more likely you’ll merit “exception pricing.” The type of information you provide, including the time duration of the deposits and extent of your banking relationship will play a critical role in receiving higher rates.

At three+one, our proprietary liquidity analysis and data algorithms can help your entity identify the necessary information needed to justify—and achieve—higher deposit rates.

Even though a public entity may have restrictions and collateral requirements, the quality and size of its deposits deserve to be recognized for its value.

The difference between what one asks for and what is received could be the difference in pay raises for staff, handling unbudgeted expenses, making up for limited resources, or narrowing a budget deficit.

Every dollar counts, so higher deposit rates are worth asking for. Make step one a well-prepared liquidity analysis by three+one.

*Demos, T. and Rexrode, C. Wealthier Depositors Pressure Banks To Pay Up. Wall Street Journal, Oct. 24, 2017. Retrieved from