I have become increasingly turned off by big banks (I use Wells Fargo). Maybe it’s the 80% of my friends who hate dealing with their banks. Or the nickel-and-dime fees that produce $50 billion in fees per year for banks (“more than twice the total of a decade ago”) (link via Consumerist).
That’s why online banks like ING (which I also use), Emigrant Direct, and HSBC Direct are eating the Big Banks’ lunch: They’re simple, easy, and they don’t try to trick us. I’m a big fan of these accounts.
So when I got an email from a bank’s PR firm yesterday, I was not surprised to see more of the same — only this time using a new online bank.
I liked your recent blog posting and was interested in the commonwealth club. As I was reading some of the comments, I thought you might enjoy sharing this new 6.00% APY  from [BANK NAME] with your readers. (See details in release pasted below.)
NEW INTERNET BANK WITH 6.00% APY ONLINE SAVINGS ACCOUNT (XXX) LAUNCHED BY [BANK NAME]
SOMEPLACE, SOMEWHERE — MAY 21, 2007 — [BANK NAME], member FDIC, a subsidiary of [BIG BANK NAME], the largest private banking company in the United States, today launched its new Internet bank – [BANK NAME] – to establish a national presence in the $120 billion Online Savings Account market (1). [BANK NAME] is entering the market with a 6.00% APY (2) Online Savings Account (XXX), an industry high, with no fees or minimum balances required. Any and all account holders will receive the rate of 6.00% APY, today through September 28, 2007.
I was happy that the bank is reaching out to bloggers, but unfortunately I’m not interested in teaser rates, which are just more typical bank behavior. I told the bank this and asked them to write back when they had new products that would benefit my readers.
Guys, these teaser rates are BS. I’ve seen them from huge banks and now I’ve seen them from small banks. Think long-term: Do you really want to go with a bank that’s just giving you a teaser rate, only to reduce your interest rate later? Can you imagine spending 5, 10, or 20 years with that kind of bank?
Also, do you really want to spend the time figuring out which bank is offering the best deals this month? That’s a colossal waste of time for most of us, since 1% more here or there equals a few dollars/month more in interest.
I always say that managing money is not that hard. But part of that is choosing financial accounts that are built for the long-term, even (especially?) if they don’t have shiny teaser rates.
Note: A few months ago, I spoke at the National Association of Credit Unions, where I advised them to create products (like savings accounts) that really resonate with what young people want today. If you’re interested, I’ll post more about what I said. (Invite me to speak for your organization, company, or school.)