Index Investing News
Wednesday, May 14, 2025
No Result
View All Result
  • Login
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion
No Result
View All Result
Index Investing News
No Result
View All Result

Upgrade offers 3.5% APY as deposits battle heats up

by Index Investing News
October 29, 2022
in Markets
Reading Time: 3 mins read
A A
0
Home Markets
Share on FacebookShare on Twitter


Upgrade CEO Renaud Laplanche speaks at a conference in Brooklyn, New York, in 2018.

Alex Flynn | Bloomberg via Getty Images

Credit card startup Upgrade is releasing a new savings account with what it says is the country’s top interest rate as competition for deposits heats up, CNBC has learned.

The fintech firm’s Premier Savings account is being launched Thursday with a 3.5% annual percentage yield, according to CEO Renaud Laplanche. That is higher than any account currently tracked by Bankrate.com, senior analyst Ted Rossman said in an email.

“At 3.5%, we’re by far the best savings account in the country,” Laplanche said during an interview.

Competition for deposits is beginning to heat up after an era in which banks were flooded with cash and had little reason to raise rates. That started to change as the Federal Reserve embarked on its most aggressive rate-boosting campaign in decades, squeezing borrowers and finally rewarding long-suffering savers.

A year ago, high-yield savings accounts had APYs around 0.5%; now many are over 2%.

The dynamic is closely watched by banking analysts because higher funding costs affect how much the industry stands to benefit from future Fed moves. Even big banks, including JPMorgan Chase and Wells Fargo, have boosted rates for CDs recently, unlike earlier this year when it was mostly smaller institutions raising payouts, Morgan Stanley analyst Betsy Graseck said in a Sept. 30 note.

“This suggests that deposit-pricing pressure is becoming more widely dispersed across the banking industry as rates move sharply higher,” Graseck said. “We believe deposit price competition will continue intensifying from here.”

One reason for that is because fintech players are more established now than in previous rate-hiking cycles, and they tend to pay the highest rates, according to the veteran analyst.

Network effects

Upgrade, a San Francisco-based startup founded by Laplanche in 2016, can afford to pay higher rates than rivals because of its network of 200 small banks and credit unions, according to the CEO. These institutions don’t have national deposit-gathering platforms and, as a result, are willing to pay more for funding, he said.  

“These deposits are a lot more valuable to us and to our small partner banks than they are to others,” Laplanche said. “We can make sure they have all the funding they need because we can raise deposits on their behalf.”

Hours after Upgrade’s move, other firms including Dollar Savings Direct matched the 3.5% rate, according to Rossman.

Ironically, the next highest rate listed by Bankrate.com earlier this week was offered by LendingClub at 3.12%. Laplanche co-founded the fintech pioneer in 2006 before departing a decade later.

Similar to other fintech firms like Chime which offer banking services through smartphone apps, Upgrade isn’t a bank; it partners with institutions including Cross River Bank to offer FDIC-backed accounts.

Upgrade’s new account requires a minimum balance of $1,000 to earn the 3.5% APY. It has few restrictions apart from that; the accounts aren’t capped and don’t require users to sign up for Upgrade’s other products to take advantage of the rate, Laplanche said.

Other fintech players offer higher rates on limited amounts of money. Fintech firm Current, for instance, offers a 4% APY, but only for savings up to $6,000.

Headed higher

Laplanche said his product’s rate is likely to climb further in coming months as the Fed attempts to wrangle inflation by boosting its benchmark rate, he said.

“We’ll follow along with what the Fed is doing,” the CEO said. “If they continue to raise rates, there might be a point next year where we’ll pay 4.5%.”

Upgrade, which was valued at $6.28 billion in a private funding round late last year, is best known for credit cards that turn monthly balances into installment loans.

That feature automates financial discipline for its users and generally reduces the interest they pay versus traditional cards. The product appears to be gaining traction; Upgrade was the fastest-growing card issuer by outstanding balances among the top 50 players, according to industry newsletter the Nilson Report.

Upgrade will continue to build products with the aim of helping Americans navigate life events, including by eventually offering car loans and mortgages, Laplanche said. And unlike many other direct-to-consumer fintech firms, Upgrade is profitable and doesn’t need to raise more funding, he said.

“The world was awash with liquidity and deposits just a year ago,” Laplanche said. “Now you’re seeing the opposite is happening and deposits are becoming really valuable again.”



Source link

Tags: APYBattleDepositsheatsOffersupgrade
ShareTweetShareShare
Previous Post

Binance Boss Warns Users Of Crypto Scam Sites On Google Search Results

Next Post

The 10 Best Small-Cap Dividend Stocks You’ve Never Heard Of

Related Posts

Inventory and crypto buying and selling website eToro costs IPO at  per share

Inventory and crypto buying and selling website eToro costs IPO at $52 per share

by Index Investing News
May 14, 2025
0

Omar Marques | Sopa Photos | Lightrocket | Getty PhotosEToro, a inventory brokerage platform that is been ramping up in...

Coinbase jumps 24% after S&P 500 inclusion

Coinbase jumps 24% after S&P 500 inclusion

by Index Investing News
May 13, 2025
0

Brian Armstrong, chief govt officer of Coinbase International Inc., speaks throughout the Messari Mainnet summit in New York, on Thursday,...

What to search for when Residence Depot (HD) studies Q1 2025 earnings

What to search for when Residence Depot (HD) studies Q1 2025 earnings

by Index Investing News
May 14, 2025
0

Residence Depot (NYSE: HD) is working to beat the impression of macroeconomic challenges on the enterprise, primarily via diversification and...

Right here’s the inflation breakdown for April 2025 — in a single chart

Right here’s the inflation breakdown for April 2025 — in a single chart

by Index Investing News
May 14, 2025
0

Transport containers are offloaded from a cargo ship at PortMiami on April 15, 2025 in Miami.Joe Raedle | Getty PhotographsInflation...

Earnings Abstract: Simon Property Group (SPG) Q1 2025 revenues rise modestly

Earnings Abstract: Simon Property Group (SPG) Q1 2025 revenues rise modestly

by Index Investing News
May 13, 2025
0

Simon Property Group, Inc. (NYSE: SPG), an actual property funding belief engaged within the possession of premier procuring and leisure...

Next Post
The 10 Best Small-Cap Dividend Stocks You’ve Never Heard Of

The 10 Best Small-Cap Dividend Stocks You've Never Heard Of

Rangers must unleash Rabbi Matondo

Rangers must unleash Rabbi Matondo

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED

Official Trailer for Animated Series ‘Fright Krewe’ Set in New Orleans

Official Trailer for Animated Series ‘Fright Krewe’ Set in New Orleans

September 14, 2023
Israel’s forex reserves climb back above 0b

Israel’s forex reserves climb back above $200b

July 6, 2023
Pakistani journalist booked for linking ‘disrespectful’ statements about Islam to ex-PM Imran Khan

Pakistani journalist booked for linking ‘disrespectful’ statements about Islam to ex-PM Imran Khan

August 28, 2022
UFC 304 LIVE: Tom Aspinall and Leon Edwards combat updates and outcomes tonight

UFC 304 LIVE: Tom Aspinall and Leon Edwards combat updates and outcomes tonight

July 28, 2024
Canadian House Properties REIT: Lengthy Time period Compounder

Canadian House Properties REIT: Lengthy Time period Compounder

July 13, 2022
Forgetting the secrets of ancient crops could threaten our health

Forgetting the secrets of ancient crops could threaten our health

December 12, 2022
Mother’s wrestle to rescue son from Russian torture has blissful ending

Mother’s wrestle to rescue son from Russian torture has blissful ending

September 24, 2024
Inflation battle: RBI performs catch-up, hikes repo fee by 50 bps

Inflation battle: RBI performs catch-up, hikes repo fee by 50 bps

June 9, 2022
Index Investing News

Get the latest news and follow the coverage of Investing, World News, Stocks, Market Analysis, Business & Financial News, and more from the top trusted sources.

  • 1717575246.7
  • Browse the latest news about investing and more
  • Contact us
  • Cookie Privacy Policy
  • Disclaimer
  • DMCA
  • Privacy Policy
  • Terms and Conditions
  • xtw18387b488

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • World
  • Investing
  • Financial
  • Economy
  • Markets
  • Stocks
  • Crypto
  • Property
  • Sport
  • Entertainment
  • Opinion

Copyright © 2022 - Index Investing News.
Index Investing News is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In