ST. LOUIS (11/24/08)--The competition is on for the consumer's deposit dollar in St. Louis, with banks and credit unions paying unusually high certificate rates, according to St. Louis Post-Dispatch (Nov. 21). Last week a saver could have landed 5% interest on a 14-month certificate at a St. Louis branch of lst Financial CU, based in St. Charles, Mo., reported the newspaper. Neighbors CU, a $205 million asset credit union in St. Louis, was offering 4.25% on seven- to 10-month certificates. And a local bank was offering 4.3% on 20-month certificates of deposit to customers who opened a checking account. The credit freeze is adding to the pressures of the recession. First Financial CU CEO Nina Pilger told the Post-Dispatch that its loan demand is up but it hasn't been able to attract the deposits. And deposits are what finances loans. The demand is largely for auto loans, fueled by auto manufacturers whose captive finance companies are turning down buyers. "We're financing cars right and left," Pilger said. The car loans have a 5.5% interest rate. With CDs paying 5%, that leaves a slim profit margin and makes for a lean bottom line, the article said. The St. Louis market has always been known as a high-deposit cost market because it has 140 banks vying business there, said analysts, who predict the rates likely will come down. Nationally, CD rates are already dropping and have been the past five weeks, said Bankrate.com.