Tower FCU Finds Cash Still King
LAUREL, Md. — While interchange rules have created debate around potential shifts in checking account marketshare, Tower FCU here continues to see strong response to an offer that pays up to $125 to new members.
The $2.2-billion TFCU said it has increased the number of direct deposit accounts by 23% in the four years since establishing its "Direct Deposit Cash Bonus" program. According to Patricia Wagaman, Tower's advertising and marketing manager, the enterprise was launched in 2007 as a way to encourage saving among members and build long-term product and service relationships to cover the costs of the promotion. Members are required to set up a direct deposit account with Tower when they enroll.
Wagaman cited a statistic that consumers with direct deposit checking accounts deposit an average of $90 more per month over consumers without direct deposit. Since the program's launch, Tower's checking and savings account balances have increased by 31%, and Tower FCU has added nearly $500-million in assets since 2007 when the campaign started. The promotion is open to any member establishing a checking account. Current members with existing checking accounts who did not participate in direct deposit were eligible to receive a $100 reward for enrolling. Tower offers free checking to members, with a minimum $10 deposit necessary to open an account.
The promo requires that in addition to direct deposit, account members must maintain a minimum of two consecutive monthly deposits of $100 or more. Executives said that the $125 offer was competitive in the market, even exceeding many similar offers.
Wagaman said that while a number of other financial institutions-both CUs and banks-have similar programs, she said that Tower's campaign has bested much of the competition in the region as it has relatively few strings attached and is not limited to any specific period of time. According to Tower's Sept. 30 2010 Statement of Financial Condition, the CU has more than $240 million in checking account balances, up from to $216 million for 2009. Wagaman said that the number of people taking part in the promotion often levels off by the end of each year, but the CU has maintained interest and spiked numbers in each new year by revamping the ad strategy and outreach around the program. The offer, however, stays the same.