Earlier this year, People's Bank of Bridgeport, Conn., joined the small but growing number of banks offering low-minimum-balance deposit accounts that appeal to electronically savvy consumers. But the accounts have a catch: Customers will be charged for using tellers.
People's "e.plus checking" account offers free monthly checking services and free, unlimited automated teller machine transactions at People's Bank ATMs for a minimum monthly balance of $750, or $1,500 in a savings account.
But customers who opt for the account will be assessed $3 for each teller transaction that could have been done by ATM, telephone, or personal computer.
"We are reacting to what we saw by looking at our customer data," said Gerald Sargent, vice president of consumer deposit products at the $7.5 billion-asset institution. "We think the people who will like e.plus are the ones that don't have the time or the inclination to go to their branch."
Eleven banks have instituted similar accounts, according to a survey by retail banking consultant NBW Consulting Inc.
Such accounts, designed primarily to encourage the use of electronic banking services, are an increasingly popular method of steering unprofitable customers away from tellers, consultants said.
"Banks are getting a better idea of who their customers are," said Les Dinkin, a managing principal at NBW Consulting. "They motivate customers to assess the type of account they really want."
The new accounts are "carrots" for bank customers who want services at lower costs, said Mr. Dinkin. Banks can use them to reduce expenses in their branch networks. For one, the accounts discourage the use of tellers for simple transactions like making deposits.
"Banks are not going to make an awful lot of money for high-touch transactions using tellers," said Jeb Britton, a consultant at San Francisco-based Spectrem Group. "They have to make customers profitable by making transactions as electronic as possible."
Two years ago, First Chicago Corp. invoked a wave of criticism for a line of low-cost deposit accounts that included a $3 fee for using tellers in some instances.
But First Chicago's experiment has been, according to most observers, highly successful. After the introduction of its "self-service" checking account in 1995, First Chicago saw a 150% increase in deposits made through its ATMs, said a spokesman. Teller transactions fell, and overall ATM use grew 20%.
At People's, it's too early to tell how e.plus checking is doing. But Mr. Sargent said there has been no angry backlash from customers against the teller fee.
A smattering of large banks have launched similar accounts. In San Francisco, BankAmerica Corp.'s "versateller" account offers no minimum monthly balance and free, unlimited use of Bank of America ATMs. But account holders are charged $2 for using tellers.
Pittsburgh-based PNC Bank Corp.'s "express checking" account has no minimum balance and up to 20 free monthly ATM withdrawals, but a $2 fee per teller transaction.
(At all the banks with teller charges, fees do not apply for transactions like the purchase of traveler's checks or money orders.)
Customers are responding, consultants said. Spectrem Group's Mr. Britton, who recently opened a new account at one of the banks that charges teller fees, said his own behavior has changed.
"I've started to use my debit card more," he said. "Maybe it's not as good as going through a drive-through window and getting a dog biscuit every time, but it's better for the bank."
