If Zero Rates Are Gone for Good, What Is a Checking Account Worth to a Bank?

As interest rates rise, checking accounts become increasingly valuable to banks like Bank of America because they represent the lowest-cost source of capital available. Unlike mortgage REITs that are subject to market rates, banks have control over deposit rates and can maintain profitable spreads between borrowing and lending costs. The stickiness of customer relationships and switching costs further enhance the value of checking accounts in a higher-rate environment.