Online-only savings accounts can be effective deposit-gathering vehicles for banks, but executives at Frost National Bank in San Antonio say they do not exactly create customer loyalty.

After all, the accounts are often linked to accounts at other banks, and customers with online-only accounts rarely, if ever, speak to bank representatives, said Ericka Pullin, a senior vice president at the $13.7 billion-asset unit of Cullen/Frost Bankers Inc.

Ms. Pullin said, though, that she believes Frost has hit on an idea for an online savings account that will both attract customers and retain them for the long term.

On Monday, the bank rolled out its Frost Momentum account, an online savings account that is linked to a debit card and lets customers make transactions at Frost branches. Customers who open accounts will also have access to online money management tools that let them monitor how they are spending their money and set up savings folders for specific purposes, such as buying a house or a car.

Technology analysts said the money management tool could be particularly attractive to Generation Y. Indeed, Frost intends to market the Momentum account on college campuses.

But Bobby Berman, Frost's group executive vice president of e-commerce, said his company is not targeting a single age demographic.

"This is for consumers who would prefer to conduct business online and those looking for a high rate," he said.

Several banks have sought to attract consumers with online, interest-bearing accounts in recent years, and some have begun recently to tailor their sites for Generation Y by adding money management tools built into the account. For example, PNC Financial Services Group Inc. this month introduced PNCvirtualwallet.com, which offers customers money management tools for three linked accounts, including a savings account that pays 3% interest.

Emmett Higdon, a senior analyst at Forrester Research, said his company is talking with several financial institutions that are considering products similar to PNC's and Frost's. Such accounts are attractive because they tie customers to their banks and, by offering incentives for savings, can help boost deposits.

"I think we will certainly see more functionality of this type coming out in general," he said. "It helps people save — encouraging them to see the relationship between income, goals, and spending — and helps them understand where their money is going every month with the hopes of getting them to channel more of that into a savings account."

Until it developed the Momentum account, Ms. Pullin said, Frost had been reluctant to offer online-only accounts because it believes customers should have the option of talking to bankers face-to-face if they need to.

"I don't think we would ever launch any type of product or account without providing the same level of customer service to a new customer that we extend to our existing customers," she said.

Aside from letting customers use branches if necessary, the Frost Momentum account offers tiered interest rates based on account balances, and it rewards with higher interest rates account holders who use their debit cards.

Ms. Pullin said that young professionals would benefit the most because they would be the most likely to have $15,000 in savings, the minimum required to get the best interest rate, 3%. Frost pays 0.78% to those with less than $15,000. For those with more than $150,000 the rate is 1.75%, and Frost hopes to move them into investment products.

"The young professional group gets the most value from this account, but there is something for those just starting out," she said, "and they can work toward building their balance."

The Frost Momentum account, which must be opened online, does not come with checks. Instead, customers can use bill pay but are encouraged to use their debit cards because, for every 10 transactions per month, the interest rate rises five basis points, to a maximum of 25 additional basis points.

Ron Shevlin, a senior analyst at the financial services analysis firm Aite Group, said Frost picked an odd mix of product characteristics; it does not offer everything that one particular customer demographic would be interested in, he said.

"Clearly the under-30 crowd doesn't have $15,000 to throw into a checking account," he said. "And on the other hand, the over-35 consumer tends to be less reliant on debit cards because they grew up with credit cards and haven't made the shift to debit cards — and if they have $15,000 it's very unlikely they are parking it in a high-yield checking account."

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