Well, that didn’t take long.
At least two of Atlanta’s biggest banks were quick to announce increases in their prime interest rates for borrowers Wednesday in the wake of the Federal Reserve raising its benchmark interest rate for the first time since before the financial crisis.
SunTrust Banks, Atlanta’s biggest, and San Francisco-based Wells Fargo, No. 2 by deposits in metro Atlanta, both announced plans to raise rates that set the basis for their consumer and commercial loans. The rate increase of 25 percentage points matches the rate hike by the Fed on its short-term rate.
The new rates will go into effect Thursday.
SunTrust said in a news release its prime rate last changed in December 2008, the same time the Fed slashed its short-term rates to practically zero to help stimulate a moribund economy.
The rates for borrowers are going up, but customers with savings accounts and CDs aren’t likely to see such an immediate increase in the interest rates paid to them by banks for holding their deposits.
The interest rate hike by the Fed could help energize banks’ profits because the interest rates of many floating rate consumer loans, credit cards and other instruments are tied to the prime rate.