On June 16, 1933, President Roosevelt signed into law the banking act of 1933, Section 11 of which specified that "No bank shall, directly or indirectly, by any device whatsoever, pay an interest on any deposit which is payable on demand."

We examine the dynamics of eleven different deposit rates for a panel of over 2,500 branches of about 900 depository institutions observed weekly over ten years. We replicate previous work showing that rates are downwards-flexible and upwards-sticky, and show that a simple menu cost model can...