Effective Deposit Pricing-III

Topics:
Pricing Strategy
Tags:
Farin & Associates,
Service Line
Source:
Farin & Associates

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Overview: The main focus of this article is upon the market segmentation tactics I.e. non-maturity deposits. It focusses upon tactics used to separate rate-sensitive non-maturity deposit customers from those that are non-rate sensitive, how tiering down can be used to experiment with pricing a non-maturity deposit service line without affecting the entire service line and introduce a method for segmenting non-maturity deposit accounts based on both balances and features. In total, introduction of the new service lines raise $10.5 million of new funds at a marginal cost of 5.21%, 46 basis points below the bogey. Of course, this analysis is highly dependent on the transfer and new money assumptions in this analysis.

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Format: HTML | Date: Jan 2003 | Pages: 1


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