People – and I mean massive numbers of people – have finally figured out that they’ve been getting screwed by near-0% interest rates on their bank deposits, and they’re moving huge sums of money around, as deposits have suddenly turned into hot money, forcing banks to respond by offering better deals. And the land is now awash with banks offering 5%-plus on CDs, and people are moving huge sums from some banks into other banks, from money-market accounts to CDs, from checking and savings accounts to CDs, money market accounts, etc., and they’re massively piling into Treasury securities. The goal is low-risk 4% to 5%-plus.

And the amounts and flows are huge between deposits ($17 trillion), regular money market funds, Treasury money market funds, Treasury bills ($4.1 trillion of 1-year or shorter maturities), and Treasury securities with a relatively short remaining maturity.

My broker today offered CDs up to five years with the top rates for all maturities at 5%-plus, from all kinds of banks, small and large. The top rate offered was an 18 months CD paying 5.4%. Those are efforts by banks to get new deposits.

Battle for Deposits: Tired of Getting Screwed by Banks, People Yank their Cash Out, Forcing Banks to Pay Higher Interest Rates. Treasury Yields Are a Mess Though | Wolf Street