May 7 The U.S. credit card unit of Barclays is joining the competition for online savings from individuals.
Barclays introduced a website on Monday to take deposits in a push to diversify its funding for its roughly $12 billion of card assets, said Steve Carp, managing director of deposits for Barclays US in Wilmington, Delaware.
The card business currently gets roughly half of its funding from so-called brokered-deposits, which are generally considered less stable than deposits made by individuals. The other half of the funding comes from the subsidiary's London-based parent.
The Barclays site will compete on rates for high-yield savings accounts and for certificates of deposit, Carp said.
Carp acknowledged in an interview that online competition for deposits has increased recently with bidding for funds by Ally Financial Inc, CIT Group and ING Direct, a unit of Capital One Financial Corp.
But Carp said consumer interest in online savings has increased as well. "It is a segment that is growing," Carp said. A survey commissioned by Barclays found that 58 percent of adults with savings accounts would switch to an online-only account if it consistently offered higher rates.
The ease with which people can transfer funds over the internet will help, he said. Individuals will be able to link existing checking accounts at other banks directly to Barclays online savings accounts, Carp said.
The unit issues co-branded credit cards with companies including retailer LL Bean and US Airways.