Personal Finance

Need a Checking Account? Prepare to Get Tight With Your Bank

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Looking for new checking account? Get ready to have a much more intimate relationship with your bank.

These days, banks don’t want you to simply open that checking account and stop. They want you to open multiple accounts, enroll in rewards programs, and use the bank as your financial advisor, according to a new study by Market Rates Insight, a bank research firm.

The goal: Tying you and your bank closer together. Banks hope that will boost their profits, and make it less likely that you’ll be lured away by other banks’ offers.

New accounts “have one thing in common: they are all designed to increase the relationship and contact surface with customers, which translates into greater fee revenue for the institution,” Dan Geller, vice president of Market Rates Insight, says in a press release.

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Geller surveyed bankers at 1,700 financial institutions. He found that many banks have made big changes in the types of new accounts they offer since the last survey, in July 2009. The biggest change has come in checking accounts with rewards programs and interest rate caps. These accounts tend to offer higher-than-average interest rates, currently about 1.2%, but cap the amount of money in the account that can be counted toward interest payments.

The number of these accounts offered to consumers has increased 3.8% in the last two years, Geller found.

After that, high-balance checking accounts are the second fastest-growing type. They have grown 3.5% since July 2009. The number of offers that merge new checking accounts with asset management services also grew by about 1%.

Meanwhile, the number of basic checking account offers shrank by 1.1%. The biggest drop came in accounts with tiered interest payments, in which the interest rate rises the more money customers deposit. Such offers dropped by 4.7%. That’s a significant decline, especially since tiered interest accounts have been so popular for so many years. Even with the decline, such accounts make up 38.3% of all offers from banks, still the biggest category by far.

The tiered interest account, “which traditionally was the work-horse of transaction accounts, has experienced the largest decrease since the end of the last recession,” Geller says.

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