The Great Bank Giveaway
To nab a free rice cooker, 4,000 customers signed up for accounts at Commerce Bank's new Chinatown branch in New York City. In Oklahoma's barbecue country, First Fidelity Bank entices depositors with George Foreman Grills. And Chase pulls in yuppies by handing out iPods. Hot competition for profitable customers (those willing to keep lots of money in low-interest savings and checking accounts) has set off a bank bidding war. Mark Hebeka, a banking industry analyst for Standard & Poor's, says that while the best deals often require minimum deposits of $2,500 for at least a year, they can still be pretty sweet. At today's low CD rates, you'll lose only about $100 a year, the price of a low-end iPod. This is quite a change from the bad old days, when banks dangled boring appliances like toasters. An especially popular lure, says Hebeka: cold cash. Bank of America has offered to match as much as $250 in deposits to new savings accounts. Today's customers, it seems, don't want toast. They want dough.
This story appears in the December 26, 2005 print edition of U.S. News & World Report.
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