In a recent move to attract new capital, JPMorgan Chase (NYSE: JPM ) & Co. has introduced a lucrative six-month certificate of deposit (CD) offering a 6% interest rate, according to a report by The Wall Street Journal on Thursday. This offer is specifically available for funds sourced externally and is capped at $100 million. The bank has set a deadline of Saturday for this offer.
This new interest rate surpasses JPMorgan's earlier offer of 5% for deposits above $100,000. Adam Stockton of Curinos compared this rate to regular and wealth-management deposit offers, indicating a significant increase in the bank's efforts to attract larger deposits.
JPMorgan's growth strategy is backed by a solid financial performance with a market cap of $432.54 billion USD and a P/E ratio of 9.53, as provided by InvestingPro. The bank has also shown a promising revenue growth of 12.14% in the last twelve months (LTM2023.Q2), which has been accelerating, as per InvestingPro data and tips.
It is important to note that this higher interest rate is not applicable to all customers. Those depositing less than $100,000 will receive a 4% rate on their CDs. The bank continues to pay only a 0.1% interest rate for interest-bearing checking and savings accounts.
As a prominent player in the banking industry, JPMorgan has maintained dividend payments for 53 consecutive years and has raised its dividend for 13 consecutive years, according to InvestingPro Tips. This is in line with the bank's dividend yield of 2.88% and a dividend growth of 5.0% in the last twelve months (LTM2023.Q2), as shown in the InvestingPro data.
This strategy by JPMorgan demonstrates an aggressive approach towards attracting new capital through higher interest rates, while maintaining lower rates for smaller deposits and regular accounts. It remains to be seen what impact this will have on the bank's overall deposit growth and how competitors might respond to this move.
For those interested in more insights like these, there are 10 additional tips listed on the InvestingPro platform. These tips, alongside real-time metrics, provide valuable insights into the performance and potential of companies like JPMorgan.
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