RSS Subscribe
TeleBank Offers Lowest Net-checking Prices
By Jim Bruene on July 11, 1998 8:30 AM | 0 CommentsTeleBank
TeleBank’s interactive savings worksheet.
TeleBank (Arlington, VA; $998 million), which discovered “direct banking” years before it became a hip concept, has put together an excellent deposit-gathering site with the lowest Net-checking prices in cyberspace. The platform is from S1 www.s1.com .
TeleBank has succeeded in adding an interactive twist to plain vanilla CDs and money-market deposit accounts. The company’s Java-based savings worksheet (input screenshot on previous page; output screenshot below) automatically calculates the additional interest your deposit will gain with TeleBank’s rates compared to the average in your state. You can also compare to national averages. Bank Rate Monitor www.bankrate.com provides comparison rates. Comparative rates were slightly stale (two weeks old) when we visited (6/16/98). The worksheet would be more effective with current information.
For any financial institution with above-market rates, comparing yours to national averages is an easy way to demonstrate the competitiveness of your offerings, especially on products like interest-bearing checking where national averages are quite low. The savings, compounded over long time horizons, can be impressive (see screenshot below). Worksheets can be licensed relatively inexpensively from Web developers such as SmartCalc www.smartcalc.com
We think TeleBank’s worksheet would be better if it also allowed users to override the average and input their own rates for comparison. That way it wouldn’t appear as if the bank was “forcing” users to compare only to the rates provided by the bank.
Graphical output from the savings comparison worksheet. The bottom half of the screen graphs the extra interest over 1-year, 5-year, 10-year and 20-year time horizons. It does not take into consideration taxes or time value of money. The bank should consider adding an advanced worksheet that allows for a more sophisticated analysis.
TeleBank’s free CD Maturity Alert Service sends users an email when their CD matures.
TeleBank is one of the few banks to offer a CD Maturity Alert service
(see also Canada Trust, OBR 6/97). And they are the first we know
of to place it so prominently within its Web site. Users simply enter
the amount and maturity date and TeleBank kicks out free email alert
(below).
(Note: TeleBank should add “http://” in front of the Web address so that
it appears as a live link in newer email programs.)
TeleBank offers free everything to entice potential depositors into its fold.
TeleBank has priced its transaction services as low as you can go: fee-free and APYs tiered from 3.15% to 4.65% (see tables below). You’ll be hard-pressed to compete price-wise with this offering:
TeleBank’s Free Checking*
- no monthly fee for the checking account
- no fee for Internet access
- no fee for UNLIMITED bill pay
- no fee for printed checks
- no fee for ATM card
- first 10 ATM withdrawals free (then $1 each)
- one of the highest APYs in the nation on checking balances
* The account requires a $2,500 balance to open. Users can sign up online, although the initial deposit must be mailed or wired.
TeleBank is the brainchild of two ex-Wall Street veterans, Mitchell Caplan and David Smilow who purchased Metropolitan Bank in 1989. The bank went branchless and changed its name to TeleBank in 1995 (OBR 10/96). It looks as though the strategy is working. Deposits have grown nearly 50% in the past year, from $413 million on Mar. 31, 1997, to $614 million a year later.
Contact: Mitchell Caplan is President; David Smilow is CEO, (703) 525-7874.
