How do big banks attract depositors

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How do big banks attract depositors

Postby ray.james » Wed Apr 03, 2013 2:15 pm

How does banks like bofa/chase etc who offer next to 0.01% on savings/CD's attract investors?
I always thought for a bank to make profit, they have to attract deposits and loan at higher rates to make money...or atleast how they used to be 20 years ago. How does it work today?

How low can be personal loan rates. (UnGuaranteed personal loan. I believe most banks can loan between 10k-25k once they have some salary proof.) When I checked the rates they offered are around 9% which seems to be an extreme spread between interest and loan rates.
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Re: How do big banks attract depositors

Postby tfb » Wed Apr 03, 2013 2:38 pm

ray.james wrote:How does banks like bofa/chase etc who offer next to 0.01% on savings/CD's attract investors?
I always thought for a bank to make profit, they have to attract deposits and loan at higher rates to make money...or atleast how they used to be 20 years ago. How does it work today?

By offering convenience. Branches near where you work and live. Branches in grocery stores. Branches that close late. ATMs everywhere. Face-to-face service that people still want. Some people don't see the difference between 0.8% and 0.01% as such a big deal on a few thousand dollars.

ray.james wrote:How low can be personal loan rates. (UnGuaranteed personal loan. I believe most banks can loan between 10k-25k once they have some salary proof.) When I checked the rates they offered are around 9% which seems to be an extreme spread between interest and loan rates.

Without collateral, 9% is pretty good. If you put up a paid-off car as collateral, you can get it much lower, below 2% at some credit unions.
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Re: How do big banks attract depositors

Postby mhc » Wed Apr 03, 2013 3:00 pm

Chase built a neighborhood bank close to my house. I get a promotional letter every month offering me $200 to open an account. I'm sure this attracts some.
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Re: How do big banks attract depositors

Postby kitteh » Wed Apr 03, 2013 3:21 pm

ray.james wrote:How does banks like bofa/chase etc who offer next to 0.01% on savings/CD's attract investors?


Some people just seem to not pay attention to the differences between banks and credit unions. For example, I often see people say they deal with such and such a bank because of local branches, not realizing that many credit unions belong to an organization that lets customers do transactions at all the CUs in the organization. Or they haven't looked at the differences in rates. Not everyone is as financially obsessive as bogelheads.
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Re: How do big banks attract depositors

Postby johnubc » Wed Apr 03, 2013 3:37 pm

By buying up the little banks.
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Re: How do big banks attract depositors

Postby WHL » Wed Apr 03, 2013 3:48 pm

As tfb said, I use Chase for the convenience. I originally opened my account with them because they sent me one of those "deposit $1000, get a $100 bonus!" cards. I did that, then slowly started using them for their excellent credit card sign-up bonuses. I now have three credit cards with them so I keep a small (3k) balance in my Chase checking account to pay off my monthly spending.

My primary bank is ING, and it has been since ~2007.
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Re: How do big banks attract depositors

Postby leo383 » Wed Apr 03, 2013 3:58 pm

Convenience, inertia, ignorance of other better options, that's the bank my family/friends/boss uses, etc.

The Bogleheads are a savvy and unique group in that they are up on the banking options. The average person isn't.
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Re: How do big banks attract depositors

Postby lws6772 » Wed Apr 03, 2013 4:09 pm

That's a question I have asked myself for decades. For us, they would need to offer a several thousand dollar bonus AND a cruise somewhere, say B.C. :D
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Re: How do big banks attract depositors

Postby billjohnson » Wed Apr 03, 2013 4:10 pm

tfb wrote:By offering convenience.

This. And familiarity/brand recognition.

It's the same way McDonald's sells tons of hamburgers when chances are there's a local business close by who actually make better tasting/quality hamburgers...
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Re: How do big banks attract depositors

Postby Phineas J. Whoopee » Wed Apr 03, 2013 4:24 pm

By offering only 1 basis point they've put everyone on notice they're swimming in deposits and have more cash than they know what to do with. People would be better off rolling 4-week T-bills.

They're trying to repel savers.

They're failing.

The bonuses are for opening checking accounts on which they can make lots and lots of money and on the basis of which relationships they can entice customers into accepting disadvantageous financial products which cause them to pay lots and lots and lots and lots and lots more money.

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Re: How do big banks attract depositors

Postby Confused » Wed Apr 03, 2013 4:32 pm

For me, it's because I know all the tellers and the tellers know me. I don't drink, so I can't hang out at the bar. But "bank" was next to "bar" in the yellow pages. I go there all the time, to one particular branch. I keep my house down payment money there, and I will use them for my mortgage loan in the future without shopping around to compare rates. Their service is amazing and they have earned the right to hold my money. I can go there and make a deposit, get a withdrawal, get a money order, etc whenever I need. They have brownies on Fridays.

What does an online bank offer me? 0.9% instead of 0.2%? I'll take the local convienence every time.
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Re: How do big banks attract depositors

Postby MnD » Wed Apr 03, 2013 5:46 pm

And some people have done their homework and game the big banks to their financial advantage.

I get a local branch, drive-thru and ATM ~3 minutes away, great web site for managing multiple accounts, 2.74% fixed rate zero cost refi into a first position home equity loan, free checks, 25% discount on safe deposit box, full unlimited reimbursement for non-network ATM charges, free wires, free notary, free cashiers checks, no fee unsecured credit line at 9% which functions as overdraft protection on checking (no fees for using other than daily interest), no fee Visa signature credit card with 7.5% cash back on two categories (it have two 5% back slots I use for restaurants and utility/cell phone bills and platinum customers get a 50% rewards bonus, so 7.5% back). I use my other "2% back on everything" card for everything else so the bank card really does earn 7.5% back. The kids are given 100% free checking accounts with free checks, atm cards etc.

I don't really keep any money in this bank except for money-in, money out stuff. The smallish mortgage balance and multiple accounts are enough to keep me in platinum status.
What smallish deposit balances I do have earn .05%, again "boosted" by being platinum level. I'm sure there are other benefits but the ones above are the ones I use. I actually used the unsecured credit line for a few days last year (gasp) for an opportunity that made me $650 which required access to $13k in cash on a Saturday. The interest charge was $12 I think. That seemed like a good deal. :happy It's also nice to drive a few blocks and sit down at someones desk to get something done or fixed - I just don't leave until it's taken care of. You don't have that kind of leverage with a computer or a phone call.

My real taxable account money is at my broker in equities and my emergency fund is in a tax-advantaged account earning more than banks or credit unions per this approach:
http://www.bogleheads.org/wiki/Placing_ ... ed_Account
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Re: How do big banks attract depositors

Postby Scooter57 » Wed Apr 03, 2013 6:37 pm

I get much better rates at RBS Citizens, which is my convenience bank. They know me and will notarize and do medallion guarantees for free. We had ferocious amounts of stuff to sign for my parents' estates and the manager at Citizens put in literally hours dealing with it.

None of the other local banks could sign off on the amounts involved in the guarantees. So I keep enough there to keep things going, though I ignore the many "wonderful investment opportunities" the manager has to offer me as part of his job.

BOA, where I had an account because they bought my local bank was a nightmare to deal with for anything, even with a decent balance. Nice local staff handcuffed by bank policies.
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Re: How do big banks attract depositors

Postby stratton » Wed Apr 03, 2013 6:40 pm

If a depositor is going to exceed FDIC limits then a "too big to fail" bank is better choice than a small one.

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Re: How do big banks attract depositors

Postby Calm Man » Wed Apr 03, 2013 7:31 pm

Easy. I use my Chase account only for checking and receive no interest. It is in the supermarket where I do my shopping. I have my credit card with them too and it works great. If there ever is a problem I can drop in or call. There never is a problem. Banks as far as I am concerned aren't really savings vehicles but way stations for money movement.
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Re: How do big banks attract depositors

Postby Calm Man » Wed Apr 03, 2013 7:31 pm

Easy. I use my Chase account only for checking and receive no interest. It is in the supermarket where I do my shopping. I have my credit card with them too and it works great. If there ever is a problem I can drop in or call. There never is a problem. Banks as far as I am concerned aren't really savings vehicles but way stations for money movement.
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Re: How do big banks attract depositors

Postby enderland » Wed Apr 03, 2013 9:48 pm

leo383 wrote:Convenience, inertia, ignorance of other better options, that's the bank my family/friends/boss uses, etc.

The Bogleheads are a savvy and unique group in that they are up on the banking options. The average person isn't.


Bingo.

This forum is a ridiculous minority in society.
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Re: How do big banks attract depositors

Postby john94549 » Wed Apr 03, 2013 10:21 pm

As noted by others, financial institutions don't necessarily want to attract "depositors". They do want to attract "customers". In order to attract customers, they may offer "specials" to establish a relationship. Such specials may, or may not, involve deposits.

A perfect example of this phenomenon may be found in the "local only" special CDs offered by many banks, where a branch visit is required to open the CD. Someone who lives close enough to visit a branch is more likely to become a customer of the bank. Customers generate fees and pay spreads on loans. Customers may also chat with the investment "specialist" who has a desk in the bank and sells annuities or other high ER products.

Another example of the phenomenon is "decline to renew". When a bank fails, and is acquired by another, existing CDs may be re-priced. The acquiring bank may also have no interest in renewing the CD at maturity, at its "going rate", unless you are local and come into a branch to renew.

That said, there are exceptions to every rule, and some financial institutions have thrived while offering competitive rates to any and all, hoping thereby to establish a nationwide customer base. By and large, this defines PenFed. The trick is to find the signal in the noise, as another poster put it.
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Re: How do big banks attract depositors

Postby Dulocracy » Thu Apr 04, 2013 6:34 pm

3% back on gas station purchases
2% back on grocery purchases
1% back on everything else
My wife's credit card is BOA.

Countrywide sold my mortgage to BOA with a bunch of other mortgages.

BOA automatically gets my paycheck and wife's paycheck. We pay the mortgage, car note, and credit card from the account and transfer the money out for investments, emergency fund. Emergency fund is at Ally bank. Easy transfer if needed. Vanguard account is set to withdraw the money from BOA when I tell it to withdraw. Within days of getting our paycheck, our balance at BOA is back to $1000 and our bills are paid up through that time.

Calm Man wrote: Banks as far as I am concerned aren't really savings vehicles but way stations for money movement.


Agreed.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.
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Re: How do big banks attract depositors

Postby connya » Thu Apr 04, 2013 10:09 pm

I am at a good local credit union with relatively high interest rates (0.40%) but the next time I move I will probably switch to a big bank.

The rates may not be as good but I don't use my everyday bank for loans or money stashes anyway. If I want loans I have access to Pen Fed and Navy Fed and USAA and I am sure there are many other great options I am not aware of. If I need a good savings account or money market I will go to Ally or Barclay or wherever the yield chasing Bogleheads lead me.

I like the idea of being able to move and not have to change any accounts. I also like more brick and mortar availability.
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Re: How do big banks attract depositors

Postby The Wizard » Thu Apr 04, 2013 10:21 pm

Confused wrote:For me, it's because I know all the tellers and the tellers know me. I don't drink, so I can't hang out at the bar. But "bank" was next to "bar" in the yellow pages. I go there all the time, to one particular branch. I keep my house down payment money there, and I will use them for my mortgage loan in the future without shopping around to compare rates. Their service is amazing and they have earned the right to hold my money. I can go there and make a deposit, get a withdrawal, get a money order, etc whenever I need. They have brownies on Fridays.

What does an online bank offer me? 0.9% instead of 0.2%? I'll take the local convienence every time.

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Re: How do big banks attract depositors

Postby rec7 » Thu Apr 04, 2013 10:50 pm

How do big banks attract depositors? Well I guess that was me before I found out about credit unions. I noticed that all the credit unions in our town pay better than BOA. Of course it took me several years to see that.
Last edited by rec7 on Fri Apr 05, 2013 9:29 am, edited 1 time in total.
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Re: How do big banks attract depositors

Postby Valuethinker » Fri Apr 05, 2013 6:42 am

ray.james wrote:How does banks like bofa/chase etc who offer next to 0.01% on savings/CD's attract investors?
I always thought for a bank to make profit, they have to attract deposits and loan at higher rates to make money...or atleast how they used to be 20 years ago. How does it work today?

How low can be personal loan rates. (UnGuaranteed personal loan. I believe most banks can loan between 10k-25k once they have some salary proof.) When I checked the rates they offered are around 9% which seems to be an extreme spread between interest and loan rates.


The vast majority of deposits on the Big Banks are probably wholesale -- more than $100k (now $250k?) FDIC maximums.

They raise their money in wholesale markets. If you are a corporate treasurer with $1bn of cash at any given moment, you are going to place it on deposit with 4-5 big banks not with hundreds of little ones.

As to the spreads on personal loans I don't know if they are high relative to history (what were personal loan rates in 2005 when interest rates were say 4-5%?). But yes they have widened the spreads. They have huge books of bad loans, bad mortgage loans-- they need to make profits to pay back those losses.

In retrospect loans made 2006-08 were badly underpriced relative to the default risks. Now they are probably overpriced. But banking is cyclical in that way.

Look at Japan, this state of affairs has been going on for over 20 years. It's not over yet.
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Re: How do big banks attract depositors

Postby gkaplan » Fri Apr 05, 2013 8:31 am

Toasters.
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Re: How do big banks attract depositors

Postby Grt2bOutdoors » Fri Apr 05, 2013 8:38 am

Knowledgeable employees help. I've been to some of the smaller institutions and sorry to say - they are the equivalent of a dumb terminal - take deposits in, pay cash out, check signature. :oops:
Discounts - Open a PMA with some amount of money, get a discount on safe deposit box, qualify for special rate/perk credit card.
Convienance - multiple branches in locations where I will be likely to need the services of a branch.
Safety - As Stratton mentioned before, a too big to fail bank has less likelihood of losing my uninsured deposits (not that I would ever be so stupid as to have it structured that way), but for corporations who don't receive FDIC insurance without paying for it - it's a rather big deal.
Finally, banks are super-flush with cash, they are offering extremely low rates in an effort to get rid of those liabilities - if they can't find a profitable place to invest in, why do you think they should offer you anything higher?
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Re: How do big banks attract depositors

Postby nisiprius » Fri Apr 05, 2013 9:23 am

Ubiquity and oligopoly.

I remember my folks moving to an apartment in the city and trying to decide which bank to use. The block with their apartment had a bank on the corner, and another bank diagonally across from it... and, my mom said, "I said to your dad that on really cold day it would be a pain in the neck to have to cross that street, and he said to me he was thinking that on a really hot day it would be a pain in the neck to have to cross that street"--so they chose the closer of the two branches.

Let's say you are just looking for "a bank" and aren't savvy or energetic enough to do much of a search. You are a student who's just arrived on campus and you need a place to deposit the check your folks gave you, and a way to use an ATM machine. The first bank you will probably see will probably be a big bank. There will probably be ads for a big bank in the campus newspaper, and perhaps tucked into some information packet or wad of coupons you get somewhere. You have limited time, you just need to get it done. You probably walked past the big bank on your way to McDonald's before you even noticed the credit union tucked into a hole-in-the-wall office in the student union.

As for oligopoly, it varies by state of course but where I've lived, I get the impression that state regulators won't let any single big bank totally dominate the scene, but they're totally cool with three giant bank chains splitting most of the business between them--just as long as they don't totally squeeze out alternatives for those who are willing to spend any effort looking for them. Three seems to be the magic number, I don't know why.
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Re: How do big banks attract depositors

Postby Valuethinker » Fri Apr 05, 2013 10:39 am

It's worth knowing that outside the USA I cannot think of a country (don't know Japan) where there are more than 4 or 5 main banks probably accounting for 80%+ of current accounts.

There are huge economies of scale in banking: information technology costs, ATM network costs, central processing costs etc. And there is market power in owning a larger share of current accounts. Advantages in geographic diversification (Vancouver housing market blows up, but Calgary is OK). So the industry tends towards oligopoly.

Canada: Scotia, CIBC, TD, BMO, RBC - you get a credit union sector, but the big 5 dominate every main street and shopping mall

Australia: Westpac ANZ et al.

UK: HSBC RBS Lloyds Barclays

France: Agricole, Lyonnais, SocGen, Paribas

Germany you also get the statesbanks (Landesbanks) but that is shrinking

So the US is just going where everyone already is. A handful of large main street banks. In effect, retail finance becomes a utility like gas, water, electricity, phone. They won't compete much, either-- in the UK, Canada, Australia, the domestic retail banking franchise is a very profitable one.
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Re: How do big banks attract depositors

Postby Rob5TCP » Fri Apr 05, 2013 10:47 am

About 10-12 years ago, Chase ran a promotion. When interest rates were in the 2-3% range, they were offering a 6 month CD (only for an IRA or similar) with a 5% yield.
I put in a big chunk of my retirement. Within two weeks, I was getting calls about annuities after my CD matured. There were a few more calls after that. One even said,
why I won't go with an annuity. Now, I would just tell him/her I don't owe you a reason (give them a reason and they are trained to overcome objections). Wasted a lot of
time on one persistent caller.

When I went to close it out, I was "hit on" by two different people. Finally, I brought up that my cousin was an executive VP, gave them his name and 2 minutes later
I had a check which I deposited into my other IRA.

Even without my cousin I would have gotten my money out. But, what a hassle.
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Re: How do big banks attract depositors

Postby BrandonBogle » Fri Apr 05, 2013 11:01 am

Rob5TCP wrote:About 10-12 years ago, Chase ran a promotion. When interest rates were in the 2-3% range, they were offering a 6 month CD (only for an IRA or similar) with a 5% yield.
I put in a big chunk of my retirement. Within two weeks, I was getting calls about annuities after my CD matured. There were a few more calls after that. One even said,
why I won't go with an annuity. Now, I would just tell him/her I don't owe you a reason (give them a reason and they are trained to overcome objections). Wasted a lot of
time on one persistent caller.

When I went to close it out, I was "hit on" by two different people. Finally, I brought up that my cousin was an executive VP, gave them his name and 2 minutes later
I had a check which I deposited into my other IRA.

Even without my cousin I would have gotten my money out. But, what a hassle.


On all my accounts, regardless of the bank or credit union size, I asked to have "do not solicit" on my profile to avoid tactics like that. So far that has worked great for me. I've got accounts at BoA, Chase, Wells, Citi (now closed).
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Re: How do big banks attract depositors

Postby MnD » Fri Apr 05, 2013 11:32 am

Credit union is to Southwest airlines as megaBank is to United, Delta, American etc.

If you have gold or platinum status and you "work the system" and stay informed participate on all the most lucrative deals and promotions and avoid the numerous bad deals, you can do extremely well at megabank and flying regularly on one the legacy carriers. If you not interested in working the systems at MegaBank or megaAirline, you are better off at a credit union and a no frills air carrier.
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Re: How do big banks attract depositors

Postby tfb » Fri Apr 05, 2013 1:16 pm

MnD wrote:no fee Visa signature credit card with 7.5% cash back on two categories (it have two 5% back slots I use for restaurants and utility/cell phone bills and platinum customers get a 50% rewards bonus, so 7.5% back).

I heard the 50% bonus is going away. So will the bill pay category.
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Re: How do big banks attract depositors

Postby rec7 » Fri Apr 05, 2013 8:46 pm

nisiprius wrote:Ubiquity and oligopoly.

I remember my folks moving to an apartment in the city and trying to decide which bank to use. The block with their apartment had a bank on the corner, and another bank diagonally across from it... and, my mom said, "I said to your dad that on really cold day it would be a pain in the neck to have to cross that street, and he said to me he was thinking that on a really hot day it would be a pain in the neck to have to cross that street"--so they chose the closer of the two branches.

I am a huge credit union fan but if I was on foot many times a bank would look a lot better in the wintertime. Sometimes it can be quiet a walk to a credit union.
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Re: How do big banks attract depositors

Postby newbeginning » Sat Apr 06, 2013 5:14 am

The money is on the business banking side. Services provided on the accounts of some corporations and government entities can bring in millions in fees from a single client.
With the fractional banking system they need very little in reserves in order to borrow the money to loan from the Fed and as soon as its made they sell it replacing the reserve and repeat.

Bottom line, they dont need you.
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Re: How do big banks attract depositors

Postby rec7 » Sat Apr 06, 2013 9:51 am

newbeginning wrote:The money is on the business banking side. Services provided on the accounts of some corporations and government entities can bring in millions in fees from a single client.
With the fractional banking system they need very little in reserves in order to borrow the money to loan from the Fed and as soon as its made they sell it replacing the reserve and repeat.

Bottom line, they dont need you.

True I was reading a story about the big banks. The story said they would rather not fool with people that had less than 50k (They said it in a nicer way). They do this by giving more fees to those under 50k.
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Re: How do big banks attract depositors

Postby investor » Sat Apr 06, 2013 1:27 pm

I have checking account at Large bank. No interest and no fee. Social Security and Pension checks are direct deposit. No other funds invested at the bank. Need a physical bank somewhere to obtain physical cash and provide a location for social security box. So this large bank is for convenience only

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Re: How do big banks attract depositors

Postby ram » Sat Apr 06, 2013 9:29 pm

Last year my son and I opened a bank account the day he joined college. The college had Emailed a newsletter to him that gave about 5 options and said representatives of these banks would be available on campus to open accounts. This was followed by information on each bank/CU. This was clearly in a format provided by each bank. ( i.e. no attempt made to compare anything).

I asked my son to go to each banks' website and make a table on interest earned per year on $1000, fees if any, any methods to waive fees, availability of ATM's around the campus, in the downtown area and at the airport.

Based on this we went with bank X which had parameters of
- 0% interest (for balances below $10,000)
- no monthly fees for balances above $300
- ATM in the cafeteria where he would be eating 3 meals every day, multiple ATM's around the city and ATM at the area airport.

This happened to be an small bank with branches in just one state.

We avoided the CU because it had only 2 ATMs which were a quarter mile or more away from his dorm with limited access at night and no access off campus. Loss of interest was $2 per yr.

We avoided a national chain where it would be difficult to consistently avoid all fees with a balance that a typical college student would have.

We avoided another national chain where the no fee ATM option was at a CVS store just outside the campus or in the downtown area more than a mile away.

Most other students/parents were making decisions in 5 minutes presumably without adequate data. The national chains which had rented more space, had bigger balloons and better candy and more brand name awareness with parents were attracting more attention.

His choice has served him well. He has withdrawn money from the cafeteria ATM at midnite to pay the taxi which was coming to pick him up to go to the airport at 5 am and on another occasion to withdraw money to pay for a shuttle from airport to the dorm.
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Re: How do big banks attract depositors

Postby john94549 » Sat Apr 06, 2013 10:18 pm

Ram, totally unfair. Next thing, I suppose you will attempt to quantify, nay, compare, "lessons learned" with "credits earned".

Tongue planted firmly in cheek, as it were.
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Re: How do big banks attract depositors

Postby Valuethinker » Sun Apr 07, 2013 4:48 pm

rec7 wrote:
newbeginning wrote:The money is on the business banking side. Services provided on the accounts of some corporations and government entities can bring in millions in fees from a single client.
With the fractional banking system they need very little in reserves in order to borrow the money to loan from the Fed and as soon as its made they sell it replacing the reserve and repeat.

Bottom line, they dont need you.

True I was reading a story about the big banks. The story said they would rather not fool with people that had less than 50k (They said it in a nicer way). They do this by giving more fees to those under 50k.


In contrast I think corporate banking is relatively unprofitable-- too much competition.

Small business banking (say up to $10m sales) is probably a pretty good business.

I do believe that banks want 50k depositors. That's why there is a large market in 'broked' CDs, that keep investors under FDIC limits.

In the financial crash the banks that were the biggest users of wholesale money markets (really say $1m and up) were the ones that ran into the biggest liquidity problems. From a Regulator's viewpoint, and a Bank Treasurer, the more retail deposits you have (which tend to be 'sticky') the better off you are.

They can get away with offering lower interest rates because they are blue chip and thus attract savers seeking safety (if ontly subliminally) and also because they offer big ATM networks etc. and other conveniences.
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Re: How do big banks attract depositors

Postby Valuethinker » Sun Apr 07, 2013 4:52 pm

nisiprius wrote:Ubiquity and oligopoly.



As for oligopoly, it varies by state of course but where I've lived, I get the impression that state regulators won't let any single big bank totally dominate the scene, but they're totally cool with three giant bank chains splitting most of the business between them--just as long as they don't totally squeeze out alternatives for those who are willing to spend any effort looking for them. Three seems to be the magic number, I don't know why.


I do not know if regulators have such power any more eg to limit number of branches or takeovers of banks. I think 3-4 is just about the stable equilibrium, based on Canada, UK, France etc.

Few industries tend towards absolute monopoly. 3-5 large competitors is the norm in most mature industries. (UK has 5 grocery store chains come to think of it: Sainsburys, Tesco, Asda (WalMart), Morrisons, Waitrose).
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Re: How do big banks attract depositors

Postby ejvyas » Sun Apr 07, 2013 4:57 pm

tfb wrote: Branches in grocery stores. Branches that close late. Face-to-face service that people still want.

Still looking for such a big bank. All I see is CU and local banks open late
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Re: How do big banks attract depositors

Postby Epsilon Delta » Sun Apr 07, 2013 7:05 pm

Valuethinker wrote:
I do not know if regulators have such power any more eg to limit number of branches or takeovers of banks. I think 3-4 is just about the stable equilibrium, based on Canada, UK, France etc.


In the US regulators do work to limit concentration in geographic areas, at least to the extent of interfering in acquisitions.

http://www.hsbcusa.com/ourcompany/pressroom/news_07312011_branch_sale_faqs.html wrote:4. Why were some of the HSBC branches being divested to another financial institution? Your first announcement stated that you were selling these branches to First Niagara?

The sale or divestiture of 26 HSBC branches in the Western New York region is required by the Department of Justice and banking regulators to meet guidelines limiting the concentration of deposits in a market. Divestitures such as this are typical when two banks have markets that overlap.
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Re: How do big banks attract depositors

Postby Atilla » Sun Apr 07, 2013 7:26 pm

I am a Chase bank customer. Already had their cash back credit card and they offered me a hundred bucks or so to open up a checking account with them. The bonus was I'd also get a bit more cash back on the credit card by opening the checking account. No fees for the new account and no minimum balance.

So I bit. Now I use the Chase checking account to handle my minimal debit card needs - and nothing more. I never keep more than a couple hundred dollars in the account and I use the debit card in the few places I go to regularly that won't take a credit card.

And in a pinch I have access to branches and ATM's all over the us. It works for me.
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Re: How do big banks attract depositors

Postby tfb » Sun Apr 07, 2013 9:53 pm

ejvyas wrote:
tfb wrote: Branches in grocery stores. Branches that close late. Face-to-face service that people still want.

Still looking for such a big bank. All I see is CU and local banks open late

The Chase branch in a grocery store 1/2 mile from me opens till 7 pm M-F. The nearest CU branch is 3 miles away. It closes at 5 pm M-Th, 6 pm on Fridays.
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