Oklahoma CD rates top U.S. average
BY LAURIE WINSLOW World Staff Writer
Friday, February 08, 2013
2/08/13 at 7:42 AM
The average certificate of deposit and savings account rates in Oklahoma are higher than nearly all U.S. states, according to a study by GoBankingRates.com.
Continuing its "Best Rates in Every State" series, Go Banking Rates focused its survey on interest rates offered by local banks and credit unions in Oklahoma.
The website compared Oklahoma's average rates on savings accounts as well as six-month, one-year and two-year CDs against national averages, and ranked the state against the rest of the United States for each deposit product. It found that Oklahoma's average percentage yield on the three categories of CDs and savings accounts was higher than the national average.
Some might contend that the rates are still low, regardless of how the state compares to the nation. Even so, the average percentage yield on a one-year CD in Oklahoma was 0.64 percent compared to 0.46 percent for the nation.
Likewise, the annual percentage yield of a savings account in Oklahoma was 0.34 percent compared to 0.21 percent for the nation, according to the report.
Go Banking Rate used its database of interest rates from more than 4,000 banks and credit unions to find that the average deposit account interest rates in Oklahoma are significantly higher than the national average.
The study included banks and credit unions with branches located solely in Oklahoma or with headquarters in the state. Interest rates offered by national banks were not considered in the study.
Rates are based on institutions' online published rates as of Dec. 31.
When compared to the rest of the U.S., Oklahoma interest rates ranked No. 1 in three categories: the six-month and one-year CD as well as savings account. The state ranked fifth for its two-year CD rate, according to the study.
"The reason that Oklahoma has higher CD rates is - it's just like everything else - competition creates pricing opportunities for consumers, and Oklahoma has a very robust community banking market," said Brad Swickey, chairman of the Oklahoma Bankers Association and CEO of Valliance Financial Corp., the parent of Valliance Bank in Oklahoma City. "We have over 250 charters in this state. ... That's a significant number of banks. It creates a highly competitive marketplace for CDs and loans."
The study, which also lists the top 10 CD interest rates and savings rates among credit unions and banks in Oklahoma, shows that F&M Bank in Tulsa had the top savings rate at 1 percent and the second-highest one-year CD rate at 1.05 percent at the end of December.
TTCU The Credit Union, formerly known as Tulsa Teachers Credit Union, and the Oklahoma Employees Credit Union had the third-highest two-year CD rate in the state at 1.15 percent.
The Fraternal Order of Police Credit Union had the highest six-month CD rate at 0.85 percent.
Demand for local housing market lending could be a factor affecting rates in some communities, said Casey Bond, managing editor of Go Banking Rates.
"Local institutions want to encourage deposits so they have money to lend out," Bond said. "Oklahoma does have a very strong housing market compared to the rest of the United States. ... That could be an indication of why banks in the state are so willing to offer better rates.
"The unemployment rate is quite low compared to the national unemployment rate. Things like that are indicative of a strong local economy."
Each Thursday, the Tulsa World publishes a CD annual yield chart, consisting of information submitted by local financial institutions. According to this week's list, First Oklahoma Bank had the highest one-year CD rate at 0.80 percent along with Tulsa Federal Credit Union. First Oklahoma Bank's two-year CD rate at 1.10 percent was the highest among those listed in the chart.
"We've enjoyed very solid loan growth in the Tulsa metropolitan area for the last three years we've been in business," said Tom Bennett Jr., chairman and co-CEO of First Oklahoma. "We are able to pay a higher rate to attract money that we can turn around and make loans. If we were putting it into securities, we couldn't pay that rate."
Asked why he thinks Oklahoma has higher average rates than the rest of the country, Bennett said he thinks it partially reflects a "good, strong economy."
"There is good loan growth, and other banks like us ... that are making loans, can pay higher rates on deposits," he said.
National average rate
Six-month CD 0.31 percent
One-year CD 0.46 percent
Two-year CD 0.69 percent
Savings account 0.21 percent
Oklahoma average rate
Six-month CD 0.47 percent
One-year CD 0.64 percent
Two-year CD 0.86 percent
Savings account 0.34 percent
Laurie Winslow 918-581-8466