Sometimes it pays to be a customer
In one of those Ally Bank commercials featuring cute kids (customers) confronting a wily adult (banker), the "new friend" gets no ice cream, while the "newer friend" gets his choice of chocolate, vanilla or strawberry.
When I have money deposited at a bank, I think I’m entitled to an occasional treat.
I’m referring to rates promotions offered exclusively to existing customers.
For example, I recently received a flyer from AIG Bank offering me a 12-month CD with 1.25% APY. "We make sure our best offers are made to our current customers," it said.
AIG regularly offers exclusive deals to customers involving CDs yielding somewhat more than the bank’s currently-advertised rate.
I like the show of customer appreciation. And I like the straightforward nature of its deals. I’ll probably participate in this new one, as CD rates keep plummeting.
The same day, I also got a flyer from Chase Bank, offering me a $100 cash bonus if I open a savings account with a $5,000 minimum deposit. "Thanks for being a Chase customer!" it said.
After some back-of-the-envelope calculations, I figured that, based on its lofty 0.01% APY, I can establish this account with my $5,000, close it six months later without incurring any fees, and earn $100.25 (or 4.01% APY).
Pretty decent return for six-month money. So why didn’t Chase just offer me a 4.01% six-month CD instead?
Maybe because it’s trying to get me into an account I’ll forget I have -- an account it can pay a pathetic interest rate on, and eventually charge me a bunch of fees for.
Thanks, Chase -- but no thanks.
Of course, the best customer-only deals are the "loyalty bonuses" banks sometimes pay for rolling over CDs.
Consistent with its TV ads, Ally gave me a slew of these (25 basis points each) on CDs maturing at the end of last year. I really appreciated it.
I have another Ally CD maturing soon. The bank’s maturity notice, however, didn’t mention a loyalty bonus.
I got mad. Where’s my ice cream?
But then I received a follow-up e-mail informing me I’d get the 25 basis-point bonus after all. Oh, happy days!
You see, I’m a push-over for a good deal.