Patelco's gr8 r8s
Posted by Trey Reeme on October 18th, 2007
Check out Patelco CU’s gr8 r8 Savings, where members up to age 21 get 8.00% with $1 minimum balance.
On the marketing side, I don’t know if they’re doing anything with social media to promote the account, but Common Wealth CU is proving that product tie-ins can fit in social media.
Wouldn’t it rock if they had a gr8 r8 Checking where balances could be checked via SMS? How about an iPhone/iPod Touch-optimized part of online banking and the account sign-up process?
Can any of our lawyer friends tell us whether this is legal? Does this constitute age discrimination?
Why would a CU want to do this? Little benefit is driving small deposits at a rate that is surely a loss-leader.
@benry: I believe the account is all about building loyal, long term members – and teaching youth about thrift.
I see it akin to this situation Brent documented about student branches.
What about all the student loans they gain from being first in the wallet? Or the first auto loans? Or the first home loan down the line?
Hey Trey,
I found out last night that if you enter your online banking into PFM Geezeo, you can send a text to get your balance. I bet the other PFMs, like Wesabe and Mint offer that feature too. I’m looking forward to making some jaws drop with this info.
Hi all,
Financial institutions throughout Australia have been using SMS balance services for years now.
At Savings & Loans, we see it as a great add-on to our phone and internet banking services.
I have been screaming (literally) at CUs to get on the SMS bandwagon.
We are launching the service for one of our local bank clients. But even they aren’t going all out with the service.
It is amazing that Mint and Wesabe and all the free account aggrigation services are willing to do it – but geting a CU to do it is like pulling teeth.
Even when you show how successful it is in Europe and pretty much everywhere else in the world.
Sorry, I’m still stuck on Trey’s comment that “the account is all about building loyal, long term members – and teaching youth about thrift.”
Exactly how is it doing that, Trey?
And on another note, if I were a Patelco member, I would be putting exactly $1000 in an account in the names of my three kids, my nieces, nephews, my neighbors’ kids, and anybody else I could find under the age of 21, just to get the 8% rate.
More seriously, if I were REALLY a “loyal” Patelco member, I’d be ticked off. You don’t penalize someone for investing/saving MORE money with you.
The things that make you go HUH?
Patelco does have a mobile banking site. I’ve included shots from a BlackBerry and iPod Touch.
Now that Apple has announced their SDK release (which means developers can build third party apps for the iPhone/iPod Touch rather than only being able to rely on web apps running on Safari), I wonder what online banking/personal finance apps will get there first.
Dear CU Skeptic (aka Ron Shevlin)
I’m not surprised that you missed the point of the rate. As a kid, I would take my money to the credit union and get my passbook updated and see the DIVIDENDS posted on there.
Free money!! (which clearly motivates you as an adult, so why wouldn’t it motivate a kid?)
That’s “promoting thrift”
@Ron: I still have my first checking account and my first credit card. Got ‘em at age 15 and 17 respectively. I’ve only recently switched away from the checking being my primary account.
Being first in the wallet is important.
Here’s my take on that credit card, by the way.
It’s about teaching thrift because you can see the effects of 8% interest on the account balance much easier than, say, 1%. 1% interest earns less than $1.00 per month on a $1k balance. Whoopty doo.
8% on that $1k is close to $7.00 per month. That ain’t shabby.
@Denise: I’m not the CU Skeptic. You owe him an apology—you just insulted him.
@Trey: You are the exception (I think), not the rule. For my generation, going to college was when we got our first checking account. We were treated so badly, I can’t imagine ANYONE said “I’m sticking w/ these guys”.
And I know 8% ain’t shabby—its why I want to open 150 different accounts @ 1k a piece.
Both of you: You missed MY point. Offering a 4% rate is promoting thrift just as much as offering 8%. What’s it’s really promoting is rate sensitivity. That’s ok, if that’s how you want to compete. Good luck Patelco.
@Morriss, Patrick, and Tony (and whoever else wants to answer) – Why is it taking so long for CUs in the states to get on SMS then?
Gene’s doing it in Canada, S&L in Australia (love the new logo BTW Patrick), banks are getting on it, and now PFMers are on it.
Heck, you can even get payday loans via SMS in the Netherlands thanks to Ferratum.
Morriss just left a great answer.
Is this going to open up a black market of fake under-age ids?
@DS: Haha! I somehow think “getting 8% on my savings” ranks a little below “scoring a four pack of Seagrams” on the list of reasons to get a fake ID. ;)
BTW, Jim calls Patelco’s account gr8 over at Netbanker.
Good point Derrick! I should get one of those fake IDs (I’m 45, for the record).
I would be like McLovin in “Superbad,” only in reverse. ;-)
Trey – It could be anything from “where do we start” to a complete ignorance of the technology to 90-year old board members who think text messaging is leaving notes on the fridge or SMS is a sleep disorder.
Who knows? What I do know is that technology scares people who aren’t comfortable with technology. If I am huddled up with a CU marketer in the 25 to 45 age range who is into technology, it’s fast and furious marketing tech geekapalooza. We all “Get It”. We all buy into the technology because we use it and all of our friends use it and their friends too.
The problem is that 10 years ago “The Kids” were early adopters of these technologies. Now “The Kids” are adults with kids of their own and their kids don’t know life WITHOUT this technology.
Too bad that some credit unions will be too far behind to catch up.
Would still like to know if this is legal…Seems like age discrimination to me.
I’m with Ron on the argument of what we are teaching here. If it is “be a rate shopper,” I think the credit union has missed the boat. I also think they have over-estimated youth loyalty. Even though I’m 28 (an not quite the target age for this program), I know my loyalty begins and ends at “what’s in it for me.” As soon as I find a better rate, I’m gone. And in the case of this promotion, that just means the CU is paying more for my deposits.
@Matt – Overall, I agree with you and Ron’s points here.
It’s fascinating to me that so many credit unions run rate specials all the time … and then blame people for being rate chasers.
Credit unions started as networks with a powerful social purpose (bringing affordable credit to people who were shut out of the system). That particular social purpose is largely gone, but many other opportunities remain.
Rate specials reflect a poverty of ideas.