These banks pay little or no interest on deposits. Why? They have more money than they can lend to creditworthy customers, so they don’t need the deposits they have.
Naturally, large companies have to keep their money somewhere. But if they don’t need their money immediately, they can do something like buy 3 month T-bills at 5%. Corporate treasurers know how to manage cash, so this is exactly what they’re doing. This is why shorter term interest rates have come down.
The most recent auction of 4 week T-bills was 5.89% on 5/9/23.
As of yesterday I own 26 week T-bills. 17 week t-bills and now 4 week t-bills. All of that money came out of my bank account where I was earning virtually nothing.