NYCB is paying the nation’s highest interest rate (APY)

Community Bank of New Yorkthe regional lender that needed a more than $1 billion lifeline last month, is offering the nation’s highest interest rate for a savings account.

NYCB has increased the annual percentage yield offered through its online arm, My Banking Direct, to 5.55%, higher than that of any other widely available account, according to Ken Tumin, an analyst who tracks rates on its website DepositAccounts.

This exceptional rate could be a sign that NYCB is facing funding pressures, Tumin said.

“It seems like they’re really trying hard to attract deposits,” Tumin said. “My Banking Direct has been around for a long time, over 10 years, so having an aggressive rate could be a sign of need” for financing.

NYCB’s woes began in January, when it said it was bracing for losses on commercial real estate loans that were far greater than analysts had expected. This triggered a downward spiral in its stock price, downgrades from rating agencies and multiple management changes. The bank announced a capital infusion on March 6 from investors led by former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital.

In the month leading up to the bailout announcement, NYCB lost 7% of its deposits, falling to $77.2 billion on March 5, the bank said in a presentation.

In a conference call after the capital raise, analysts asked how NYCB had managed to hold on to so much of its deposits during this tumultuous period.

“We haven’t done anything crazy on deposit pricing,” NYCB President Sandro DiNello responded. “We didn’t come up with 6% CDs or anything like that to make the numbers look good, if that’s what you’re concerned about.”

NYCB did not respond to a request for comment on its fundraising strategy.

Joseph Otting, a former comptroller of the currency, took over as CEO of the bank on April 1, about a week before the rate hike.

Despite the turnaround plan, NYCB shares still trade for less than $4 apiece and are down more than 68% year to date.

According to Tumin, other banks currently offering rates above 5% tend to be newer or smaller players than NYCB.

Among established banks, the average high-yield savings rate is around 4.4%, and several of them (including American Express, Goldman Sachs And Ally) have lowered their rates over the past month, he said. The NYCB rate also leads accounts listed on NerdWallet and Bankrate.

Customer deposits at My Banking Direct are FDIC insured up to the standard amount of $250,000.

Over the past two years, savings account rates have generally increased.

Since the regional banking crisis ravaged Silicon Valley Bank and First Republic last year, smaller players have been forced to pay higher deposit rates than giants like JPMorgan Chase in order to be competitive, said Matt Stucky, chief portfolio manager for equities at Northwestern Mutual.

“When a bank has to advertise a much higher rate, it’s usually because they have a deposit problem,” Stucky said. “It is no longer difficult for customers to change banks.”