We constantly see a tension in our society between a desire to support smaller local organizations while balancing the benefits of what an all-in-one big organization can provide. This is no different in banking. Many people love supporting smaller community banks and keeping their dollars local and in the community vs. paying CEOs and executives in other states millions of dollars. In fact, in a recent survey, 92% of account holders reported being satisfied with their community bank, while only 27% of account holders reported being satisfied at one of the 3 largest banks.
In addition to service, what if these smaller banks could offer interest rates up to 60 TIMES higher than big banks currently offer? Recently I wrote a post on online high-yield savings accounts and how they can provide better interest rates than a traditional savings account. The numbers show how little you earn in these traditional savings accounts that big banks offer. There is an additional alternative as well. BancVue has launched a brand of free checking and saving accounts called Kasasa, which provide unrivaled benefits to its' customers. Kasasa "marries big-time banking products with the personal touch of community banking." It's a win-win - a win for the customers of the products and a win for the community banks and credit unions that provide them.
Do you bank at a big bank? Have you ever been frustrated with feeling like a number or simply a means to an end? Many people turn to community banks because of the level of service and personal touch that they can provide. Kasasa is capitalizing on that and offering a product that pays out interest rates that your normal big bank can't touch. As of last month, 128 banks in 35 states have bound together to offer these accounts.
In addition, putting your money in a community bank helps to spur the economy. Community banks that have less than $10 billion in assets provide 58 percent of all small business loans in America. In turn, megabanks with over $100 billion in assets, only make up 22 percent of all small business loans. (Source: ICBA, 2011) Therefore, your dollars stay in the community instead of making big pockets even bigger.
What's In It For Me?
For starters, how about a bank account that pays 60 TIMES more interest than your current bank account? Sound too good to be true? It's not! The only stipulation is that to open one of these accounts, the institution will set a few (not too difficult) guidelines for you to meet each month. Since each bank sets these guidelines, it can vary from bank to bank. This is not an exhaustive list, but could include:
- Make a specific number of debit card transactions each month: By using your card a certain number of times each month, the bank will earn interchange fees, which brings them more revenue. By doing this, the bank is willing to pay you a higher interest rate in return since you are actively using your account.
- Enroll in receiving e-statements: Pretty simple, less paper and postage equals less cost to the bank. They are willing to pay you more to save trees and postage. Another win-win.
- Log-in to online banking each month: This demonstrates you are engaged with your account and also allows your bank to communicate with you more easily via online content. Once again, they are willing to pay you more because of this.
As you can see, these "terms" aren't too painless at all. In many cases, you may do these with your current bank each month without working up a sweat. If you don't happen to reach one of these terms in a given month, they still pay out interest, but it's more in line of what a typical big bank would pay you in interest vs. these mega interest rates. In a case like this, it is a partnership. They will help you out if you help them out. After all, isn't that what a good business relationship should be about anyhow?
Where do I sign up?
To see about opening an account, check out this page which gives you a list of banks in your area.
Have you opened an account with Kasasa? Let us know what you think. Feel free to post a comment below. We would love your feedback.