Bank Deals 
9
comments

$175 Family Value Bonuses from M&T Bank

M&T BankM&T Bank has really gotten very aggressive in its promotions lately and this time they’re offering up to $175 in “Family Value Bonuses” when you open a checking account. You can access the promotion by visiting a specialty built website, BuiltForFamilies.com, and entering your zip code to see if there are eligible accounts in your area.

I already have an M&T Bank account, so I’m not eligible, but I really like how their account comparison page tells you everything you need to know. How many other places explain their fees in plain english? If you open an M&T Select Checking, there’s a $14 monthly service fee unless you have a balance over $5,000 or total balances of $10,000, or have a mortgage originally over $100,000. Their Totally Free Checking has no minimum balance or monthly fee and is eligible for $25 in cash, $50 in gift cards.

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 Bank Deals 
9
comments

M&T Bank Checking Account $150 Bonus Promotion

M&T BankWith the economy on the road to recovery (we hope!), banks are getting back into the business of banking. What that means is an increase in the number of bank deals floating around, like new account bonuses.

This week, the promotion of note is one offered by M&T Bank (MTB). They are offering up to $150 in new account bonuses when you open a new checking account. The $150 is broken up into three phases:
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 Insurance 
26
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Beware Bank-paid Complimentary AD&D Insurance

Bank of America BranchI remember a few years ago when credit card companies would send out $5 checks to customers. The catch with the $5 check was that it enrolled you in some sort of service, usually identity theft or employment related, that was free for a month. After a month, there was a monthly fee that was either flat, in the case of the identity theft service, or a percentage of your balance, in the case of the employment related service.

Last week, I received two letters from two banks reminding me of their complimentary offer of Accidental Death & Dismemberment AD&D insurance. It’s clear in both cases they’re marketing promotions trying to get you to buy AD&D insurance from their partners. However, the two offers are very different in how they approach the customer.

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 Personal Finance 
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How to Hard Reset Your Financial Life

We have twelve bank accounts.

You read that correctly, we have twelve accounts.

Ally Bank, FNBO Direct, ING Direct, HSBC Direct, Bank of America, M&T Bank, … the list goes on.

We also have a dozen credit cards. Citi, Discover, Capital One, … again, the list goes on.

We have so many accounts because we’ve slowly acquired them over the course of the last ten years. Our financial network map is an intricated mess despite our best efforts to simplify our personal finances.

That’s why we need to hit the reset button on our financial life.

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 Banking 
6
comments

Beware False Indicators of Bank Health

People Line up at IndyMac After FailureWith IndyMac being taken into conservatorship, a lot of folks have been researching FDIC insurance and how best to protect their assets. I know I was checking all the bank ratings and announcements, looking to see if I should be worried about my assets at banks like E*Trade, ING Direct, Emigrant Direct, and HSBC Direct.

Common sense tells me that my research was unnecessary because I don’t have assets above the FDIC $100,000 insurance limit. As long as you don’t, your assets are safe. If the FDIC insurance program ever failed to protect assets up to that limit, we’d have much bigger issues to deal with. However, I wanted to get a sense as to whether recommending any of those online banks was still a smart idea. I don’t want to tell my friends that HSBC Direct is great only to find out that it’s going into conservatorship tomorrow! They already make fun of me for having a “blog.” :)

Anyway, in doing my research, I saw a lot of false indicators of bank health. These are ideas I had in my own head, like checking Bankrate’s ratings, seeing how old the bank was, the stock price, and whether it had any brick and mortar locations I could visit.

Sadly, I realized that none of these indicators were strong assurances that a bank was safe. Let’s look at each of them.

Bank Age

Banks aren’t like people, they have turnover, their personality changes, and the company you knew 80 years ago isn’t the same one that operates today. In 1995, Nick Leeson brought down Barings Bank, the oldest merchant bank in London with origins back to 1762 (and the Queen’s personal bank and the financier of the Napoleonic Wars), through futures trading and fraud. It was absolutely stunning when it happened since it was all the work of one trader (you can see a depiction in Rogue Trader with Ewan McGregor).

Barings Bank RIP (1762-1995).

Brick & Mortar Locations

If you were aware of online banks when NetBank failured last year, you probably got a little spooked. I know I was spooked a little. When junk hit the fan, there wasn’t even anywhere for anyone to go!

Whether or not the bank has a physical location isn’t a good indicator of a bank’s health. There are several banks that are entirely online, or extremely limited physical presences, such as ING Direct, that are, by all other measures, perfectly safe. IndyMac has physical locations, as the latest news reports have shown, and that didn’t help at all.

Ratings

Bankrate has a Safe & Sound rating for banks and credit unions that is a good indicator of a bank’s soundness in most cases. A rating of 1 (Superior) is better than a 5 (Lowest Rated) but neither score is really a good indicator of whether a bank is going to fail. The problem is that failures can occur extremely quickly (“The second lesson of IndyMac is that it underlines the speed with which banks can go under once confidence in them is lost.”) and Bankrate, along with many other rating services, might not update fast enough to catch the changes.

Here is the disclaimer from Bankrate’s Safe & Sound site: “Events occurring after safe & sound CAEL ratings and reports were prepared and before they are updated as scheduled may have altered an institution’s financial condition. For example, the FDIC reports that approximately 280 banking institutions were impacted by Hurricane Katrina.”

Sagging Stock Prices

IndyMac’s stock fell as it failed, much like the stock of any company going under. You might be tempted to think that a rapidly falling stock price is a good indicator of whether a bank will fail, just as how a rising stock price is a good indicator that I won’t. Sadly, the falling stock price is merely a trailing indicator because it lags what the market knows. The prime example is of all the banks and financial companies pulling money out of profits to protect against potential future subprime losses. Washington Mutual, National City, and M&T Bank all had big falls this week because of market fear though the banks themselves reiterate that they haven’t experienced any problems.

At the end of the day, your money is protected by the FDIC.

(Photo: zoliblog)


 Banking 
101
comments

Bank of America Is The Suck

I always read about how Bank of America sucks this, and Bank of America sucks that, but never had experience the suck that is Bank of America first hand. I opened an account with them a year ago with my then-fiancée because they had a branch within walking distance of my house and because they have ATMs essentially everywhere. I looked past the Bank of America horror stories because, honestly, every company has its bad moments. Well, today I met a bad enough moment to make me can Bank of America and go with M&T Bank. (I opened up a personal and business account with them because a good friend of mine works in their new business development side)

No, they didn’t screw me out of $23049823049 in fees or otherwise hosed me by being unreasonable – they did something far worse because it wasn’t some technical glitch or some procedural hangup. They’re going to lose me as a customer because they were rude. When there are as many choices as there are in the world, you can’t even mess up like that. Sorry!

Today, I went to a Bank of America branch to make some check deposits. When I walked up to the counter with my checks, the first thing the teller asks me is if I had counted the amount. I responded “No” because I wanted them to double check my math, as they always do. The responded with a bit of a roll of her eye and then asked me if I filled out a deposit slip. Again I said no, deposit slips are useless anyway. When she counts them up, she’ll print out a slip that goes with the checks and the deposit slip is just a wasted branch on a tree we’d otherwise like to keep around. This is what has happened the other half dozen times I’ve gone in to deposit a bunch of checks (and didn’t want to you the mechanized paper-cut maker of an ATM they have), the teller simply adds them up for you and you’re on your way.

So she pulled out a deposit slip and told me to fill out my name and address on the slip (useless!). Then she put a calculator in my face and told me to add up the checks. All of this was pretty terse and borderline rude but I was content to let it go. As I added up the checks and showed her the calculator, she proceeds to read out the numbers really loudly over and over again. Is there no sense of privacy? I can understand her reading them back softly, but she was speaking more than normal indoor voice.

Okay fine, whatever, at this point the interaction hadn’t gone great but it was hardly worth closing an account over. Then she looks at my balance and tried to sell me on a certificate of deposit. I politely declined. She persisted by saying I was losing money by putting my money in a regular checking account. She’s right, but I still politely declined. Then she proceeded to start talking to the customer waiting behind me! No good bye, no thank you have a nice day, nothing.

That, Bank of America, was the proverbial straw. Keep that lousy $6 you got for giving me an interest rate of 1.0%, which is essentially paying an annual fee anyway, and keep your other worthless products. We’re outta here.

It’s amazing they didn’t make it out of the first round of the Consumerist 2007 Worst Company in America contest (Verizon was a formidable opponent), but you guys should lock up the first round in 2008 against a cupcake like Toys R Us.

Update: Some people have said that I’m being a baby, that I over-reacted, (one guy said he’d punch me) and I respect all of your opinions (maybe I am a baby, but there are plenty of banking options that are more polite) and thank you for sharing them. I actually wanted to touch on the topic of over-reaction. What’s “worse” of a reaction, closing my account or calling out that teller to their manager? If anything, asking to speak to the bank manager and telling them the teller was rude seems to be like a greater over-reaction than closing an account. Thoughts on that?


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