Uniform Bank Performance Report - Anderson School of Management

deposits, as well as its 100 year plus experience in the banking industry, allows the bank to quickly
respond to and meet all of its clients’ cash requirements for demand deposit accounts, even throughout
the 2008 credit crisis.
Certificate of Deposit
Certificates of Deposit, or CDs, are a form of time deposit. This means that once deposited, a customer
will not be able to withdraw their funds until a pre‐determined amount of time has passed. In exchange
for this inconvenience, time deposits often carry higher interest rates than demand deposits. A CD
requires a contractual agreement be made between the account holder and the bank stating the
amount of time, interest rate, etc. of the deposit. CDs are insured by the FDIC in the same way as savings
and checking accounts, currently up to $250,000 per customer. Shortly after its acquisition of
Washington mutual in 2008, JPMC offered one year CDs paying 5% while the national average was just
slightly over 2%. Since then, JPMC has maintained competitive rates, but has not managed to
consistently exceed those of the national average. The graph below depicts CD rates as of October 2009.
4.000%
3.500%
3.000%
2.500%
2.000%
1.500%
1.000%
0.500%
0.000%
6 month 1yr 2yr 5yr
CD Rates
(Oct 2009)
national average
jpm