Many Americans are still earning rock-bottom rates on their savings

Deposits were starting to get interesting, even before their sudden flight from Silicon Valley Bank caused the biggest banking panic since 2008-09.

The big picture: The interest rate drought for savers ended in 2022, as the Fed's sharp increase in short-term rates prompted some banks to compete for deposits for the first time in quite a while.

• For depositors with significant sums — such as corporations — there's money to be made by shifting stockpiled cash into accounts that are paying more.

The intrigue: In textbook economics, depositors would be flocking to the accounts with the highest rates, and maximizing their returns.

• But check out the chart above: Even before this month's panic, the national average was still sitting near zero. For many savers, especially those with low dollar amounts in their accounts, inertia is strong.
• And since the panic: Money has poured into some of the country's biggest — and stingiest — banks in recent days, as fearful depositors flocked to put their money in banks deemed too big to fail.

The bottom line: During moments of financial stress, investors — that includes depositors — switch their focus from return on capital, to return of capital, meaning safety trumps all.