Tuesday Topic: Do Cash Bonuses Work?

We have pulled out all the stops in our attempts to reduce our use of stigmatized brokered deposits.  We offer free accounts that can be opened with $.01 plus a free gift at opening, and $100 overdraft privilege on day one.  Our free Kasasa Cash account pays 5.12% APY on up to $15,000 and that ceiling is changing to $25,000 soon, with reimbursement of ATM fees up to $25 each month, if qualifications are met.  Qualifications:  12 debit card purchases, e-statements, and sign in to online banking each statement cycle.  

Oh wait, you asked what has worked.  Nevermind!

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Mary Fowler
Chief Executive Officer
The Peoples Bank
Magnolia AR
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Original Message:
Sent: 01-21-2020 15:32
From: Barb Rehm
Subject: Tuesday Topic: Do Cash Bonuses Work?

CEO Bill Demchak said PNC is rethinking its cash promotions for new checking accounts, saying too many customers take the money and never use the accounts. "There's a lot of mischief in that," Demchak told American Banker, adding that cash bonuses have become "less attractive to us than some other things we're doing." PNC is offering $300 to new customers who agree to set up direct deposits totaling at least $5,000. This story caught my eye because, until last week, I had never considered one of these cash offers. In fact, I've had the same checking account since 1984 (with a community bank in Washington, D.C., that after multiple mergers, is now part of Wells Fargo.) But then Chase came into my market and offered me $1,000 for depositing $75,000 for three months.

Will I become one of the mischievous customers Demchak mentioned? Maybe. Wells Fargo still has my direct deposit, all my online bill pay info, and way more branches near me. Has your bank tried cash bonuses? What do you do to entice new customers to use their accounts? I'd love to hear what has worked for your bank?

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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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