By AnnaMaria Andriotis
Last weekend, I walked into a nearby Chase branch in search of a higher interest rate on my savings account. No luck there, I was told. Rates were dismally low, but a customer service representative told me the bank had a new promotion: Did I have $100,000 to deposit into a savings account? If so, Chase will give me two free front-row tickets to attend a New York City-based sports match, musical or concert.
It’s official: the era of freebies in exchange for opening up a bank account is over. Before the recession, banks gave iPods, toasters as well as cash to new customers – and that was in addition to interest rates of 4% or higher. In exchange, consumers had to deposit just a few hundred dollars into their account. Now, banks are looking for customers flush with cash and offering an incentive so small one wonders who would be attracted to it.
But apparently some consumers are enticed, the Chase rep told me. She suggested comparing the interest rate banks offer to stash that amount of cash in an account compared to what the return is with these tickets. On average, the two free tickets – available for shows at Madison Square Garden, Radio City Music Hall or the Beacon Theatre — had a value of around $400, which essentially translates into a 0.40% return. So, I dug around a bit, and found that yes, that’s how much two front-row tickets for the Cirque du Soleil show at the Garden, for example, cost. Or for a higher return on their money, the bank will give customers four front-row tickets to family shows, including the Radio City Christmas Spectacular, which cost a total of $1,000 – essentially a 1% return.
But do consumers need six digits in savings to earn interest nowadays? No, they don’t. Top yielding savings accounts still offer at least 1%, says Greg McBride, a senior financial analyst for Bankrate.com. And they require much less in cash: anywhere from as little as $0 to as much as $500 to open the account. Consumers can still find that rate on money market or savings accounts at Sallie Mae (1.10%), First Trade Union Bank (1.05%), and 1% at American Express and Discover banks.
Of course, the new promotion is a sign of the times: For deep-pocketed consumers who are tired of moving their cash from one low rate account to another, the opportunity to get free tickets to an expensive event might be worth it, says McBride. The promotion also suggests that banks no longer need to lure in customers at any cost. Bank deposits are already at a historic record high of $9.8 trillion, according to the latest data from Market Rates Insight. So, there’s little reason to roll out the red carpet unless the bank stands to make more in return.
A Chase spokesman says the bank “recently began a broad relationship with Madison Square Garden, which allows us to offer customers access to very attractive events.”