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December 15, 2020

CT ‘deposit index’ tracks record-low interest rates

PHOTO | HBJ File Connecticut Banking Commissioner Jorge Perez.
By Matt Pilon

With interest rates sitting at record lows due to the COVID-19 pandemic, Connecticut renters will see interest on their security deposits nearly slashed in half in 2021.

Connecticut Department of Banking Commissioner Jorge Perez announced Friday that the state’s so-called “deposit index” for the year ahead has been set at 0.08%.

That’s down from 0.15% for 2020, and the decline closely tracks the drop in bank account interest rates over the past year.

The deposit index is an average of rates offered on bank savings accounts and money market accounts during the final week of November. According to the Federal Reserve, savings accounts were averaging 0.05% that week, while money market accounts were averaging 0.07% for balances under $100 million and 0.13% for balances in excess of that amount. 

The state’s deposit index also sets the amount of interest paid by the State Treasurer in instances where a successful claim is made for the return of previously abandoned property, such as account balances, interest payments and stock dividends.
 

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