Banking follies from the local First Union Bank branch which still doesn't understand the word customer service:
Actually went inside the bank for the first time in a while, needing something notarized. While there I thought I would take up a little of their time and see what their current attitude was about banking/brokerage competition.
Without mentioning any competition names, I started with the CD's. Asked if they would give me a rate of 6% or so like some of the online banks. Answer: "No. We don't compete on % yields. We offer a fair rate to all our customers." Well what if I put in a lot of money? "We could maybe get you .10 better than our current offer. You see we just don't compete with the online banks like Etrade and their rates". I see, so you would rather lose a customer than give a comparable rate to what an informed customer can get elsewhere? "Yes, we just don't compete with the likes of Etrade". Ok then...........
Now what about your online broker commission of $25 per 1000 shares. I can trade elsewhere online, with the same or better services, for at least 1/2 that price. Will you reduce my commission cost to such a market competitive rate since I do a lot of business through your bank? "Again we don't compete with the discount brokerages like Etrade." So you would rather lose $1000 a month in overall banking business than compete on price? "Well, our fees are comparable to other banks in the area......."
So why do you keep using Etrade as your example for the competition? "I have had some of my customers move money there for the cheaper rates, so I have some idea what their rates are." Oh ok. So isn't that telling you something about your rates? "Well, we have countered that with offering customers a new product where they pay 1.5% of assets yearly and can trade all they want, with free advice." So how does that work? I sign up for that, and trade online, for as many trades as I like? "Well no, it is not an online product" How do you trade then? "You'd have to call your assigned financial counselor to place your trades." I laughed, he laughed, I left.
Conclusion: The banks still don't get it.
Etrade Bank CD 1 yr. Rate 6%
First Union 4.6%
etradebank.com See how much money your local bank skims off you. |
