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There is a reason the other banks do not offer more: A great deal of that money is locked up in long term, low interest assets. What do you think will happen if people try to take their money elsewhere?

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If people take their money elsewhere, the banks can borrow from the fed, just at a higher rate. So in theory, they should be willing to increase their rate up to whatever the fed-rate is, minus some margin for the risk of dealing with lower sums of deposits.

There's a direct correlation between advertising spend and interest yields on deposit accounts, which is somewhat interesting. It seems like the optimal business model is to focus more on customer acquisition than customer retention, because these products are very sticky. Churn rate for deposit accounts is like 8%, which is crazy given the rate variance.

Banks can not borrow from the Fed arbitrarily. If people take their money elsewhere en masse, the banks fail. That is what happened to SV bank, for the same reason. If anything, you can argue the Fed can save all the banks, which is true, but undesirable.

There is a good reason other banks do not offer more. Their customers aren't savvy enough to find a less well marketed consumer bank, so they don't have to pay more. That's called profit my friend.

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