Demand for First Union Corp.'s cash management account was so heavy last year, that this year, bank executives decided to actually tell people about the product.

Don McMullen, executive vice president and head of First Union's capital management group, said the Charlotte, N.C.-based bank began advertising the product, called the Cap Account, this month. The move is a departure from last year, when the bank touted the account only in its branches.

"Now that (the Cap Account) is so well proven and accepted, we're able to start catching the attention of people who are not our customers," Mr. McMullen said.

In 1996, the product attracted about $2 billion of assets in 21,000 accounts in in markets First Union entered via its acquisition of First Fidelity Bancorp., he added.

First Union's campaign is one of the most aggressive deposit offers in the region in a long time, said Les Dinkin, a retail banking consultant at NBW Consulting, Westport, Conn. The Cap Account - short for capital management - is designed to reach a larger market than similar products at other banks, he said.

"A $15,000 entry minimum would appeal to a much larger segment of the population and has substantially more appeal than Citi's (Citigold Account)," Mr. Dinkin said.

The Citicorp account has a $100,000 balance minimum.

Bankwide, assets of the First Union product increased to $18.8 billion in more than 222,000 accounts in 1996, from $11.7 billion in 146,000 accounts in 1995.

First Union began advertising the product in its markets Jan. 2, in regional editions of The Wall Street Journal, Smart Money, Kiplinger's, U.S. News and World Report, Business Week, Fortune, and Money. It is also advertising in regional newspapers like The Miami Herald and Charlotte Observer, a bank spokesman said.

In the Northeast, First Union has the advantage of being a newcomer, so it runs no risk of cannibalizing its existing customers, Mr. Dinkin said.

"This is a very aggressive entry by a new player to get recognition and attract upscale customers in a very competitive marketplace," Mr. Dinkin said. "Given where they are advertising, they appear to be targeting an affluent and upscale customer."

The cash management account was first introduced by Merrill Lynch & Co. in the 1970s and snatched commercial and retail business from banks. Other financial service companies have been copying the product ever since.

Mellon Bank Corp.'s Dreyfus Corp. unit began selling its version, called a Lion Account, this month, a company spokeswoman said. The Dreyfus account requires a minimum $50,000 balance, or a customer pays fees for some services.

Citi's product, meanwhile, carries a $125 annual fee. Customers pay an additional $25 monthly if their account balances fall below the $100,000 minimum.

Mr. McMullen said First Union is going after customers that either own investments they want to consolidate into one account or are just starting to invest. Cap Account holders can trade through the bank's discount or full-service brokerage, or even combine services from the two units, he said.

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