A Michigan community banking company said it plans a $1 million advertising campaign starting in early April to promote a revamped Web site that sells other banks' CDs.

Flagstar Bancorp, the $4.3 billion-asset parent of Bloomfield Hills-based Flagstar Bank, in December launched Bankave.com, short for "Bank Avenue," which it launched Dec. 2 to sell its own and other banks' products.

Bankave.com, the first operational site for comparing prices of multiple banks' certificates of deposit and buying them on-line, has done little business in its first months. Mark T. Hammond, Flagstar's president and vice chairman, said that could change after the company runs ads in The Wall Street Journal, USA Today, The New York Times, and national personal finance magazines.

"This is not something we're just tinkering with," Mr. Hammond said. "We want this to be huge."

Just 34 CDs have been sold through Bankave.com, with the average customer depositing $12,000. Mr. Hammond said the company has not spent a dime on promoting the service, because it wanted to be sure the site functioned smoothly before a national unveiling.

Before placing the ads, Flagstar plans to retool the site to enable potential customers to negotiate rates. At present, potential customers just plug in the amount they want to deposit and the term they're seeking; then the best available rates pop up.

Bankave.com charges participating banks 0.1% of each CD they sell.

"With this site, we potentially can attract national funds without having to pay a broker 25 to 50 basis points to bring us those deposits," said Rich Larson, chief financial officer of $842 million-asset Wauwatosa (Wis.) Savings Bank. The thrift generates 10% to 20% of its deposits from national markets.

Bankave.com plans by May to enable consumers to apply for home loans on-line through Flagstar's network of 4,000 mortgage companies. The company plans other offerings soon.

"We're looking at money market accounts, credit cards, a whole host of products," Mr. Hammond said.

Flagstar could have its work cut out for itself, said Chris Musto, director of financial services at Gomez Advisors Inc., an electronic commerce research firm in Concord, Mass. In a survey of 16,500 adult Internet users conducted this year, Gomez Advisors found that only 14% of people who regularly bank on-line use the Internet to find better rates for financial services.

"There's surprisingly limited appeal for Internet sites competing on price alone," Mr. Musto said.

Brook Newcomb, a senior analyst at Forrester Research in Cambridge, Mass., said that on-line buyers want either to build on banking relationships or to use sites that offer choices. "Sites like Bank Avenue are a step in that direction, but this one has some issues to deal with," he said.

By jumping into the mortgage business, Flagstar will face entrenched competitors such as E-Loan and Lending Tree.com. In the multi-vendor CD business, the company also could face stiff competition from Maxrate.com, an Atlanta-based start-up that hopes by April to attract 50 banks to sell CDs online.


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