By Jessica Duncan

Did you know that in Q4 2022 Competiscan observed more CD offers through direct mail and email than the entire first nine months of 2022?

The historical rate hikes designed to curb inflation have created a competitive market for consumers’ deposits and an opportunity to find the best place to grow their savings. In this month’s Commentary we feature marketing tactics used by financial institutions to either convince consumers to bring deposits to new accounts or to keep and grow the balances in their existing accounts.

First, let’s look at the banking products marketed throughout 2022. Checking remained the lead product offered through direct mail and email. Historically, checking is the primary account used to acquire new banking relationships. Once interest rates became more favorable, an influx of savings and C/D offers entered the market.

The peak in activity occurred in November 2022, when 59% of total banking offers observed were for deposit products (nonchecking). This was the first time in 2022 that checking offers did not account for the majority.

Furthermore, Q4 is often a slower season of activity. This was not the case for deposit offers. Banks and credit unions took advantage of the rate environment and maintained marketing throughout Q4. This trend didn’t just occur with traditional direct marketing channels. Digital marketing for CD advertisements skyrocketed at the end of 2022, reaching an estimated $2.5M in spend. This channel presented another avenue for companies to showcase their rates.

Not typical of recent years, financial institutions were able to tout interest-bearing products with the rate as the lead. Rates were displayed in large font and placed front and center, while graphs and callouts were used to compare the product’s earning opportunity against the national average or other accounts. In a recent Navy Federal Credit Union email, the credit union proudly cited that the 5.00% APY CD special was their “…Highest Rate in 10 years.”

Having a strong competitive rate did not minimized the presence of new account bonuses. For example, Competiscan observed Capital One launch a Q4 2022 campaign with an increased bonus payout for 360 Performance Savings accounts. New account holders could gain up to a $1,000 bonus if they deposited $100,000 or more in new funds.

In January marketing language highlighted how consumers could benefit from high-yield products to reach savings goals in the new year. We observed subject lines like “Here’s to a wealthier new year” from PenFed Credit Union and “Got goals? Reach them fast” from PayPal Savings. Truist used an eye-catching visual of holiday lights to encourage customers that this was “[their] year” and that Truist’s products and services were here to make sure their savings journey was easy.

Understanding that consumers now had a plethora of choices, Citi reinforced the product options they offered, suggesting that customers could grow their savings in more than one way. The email shown to the right provided separate call-to-action links to either fund an existing savings account or open a higher-yield 12 month CD. This tactic was likely designed to combat balance attrition and an attempt to keep the deposits within the institution.

In recent months Competiscan has observed a variety of rate increase notifications sent to existing savings customers, and a best practice has emerged with maximizing the message within these rate notification emails. The rate change communication presented an opportunity to build greater awareness of what the increase meant to the customer. One of the most striking visuals used to convey the impact of rising rates on interest bearing accounts was sent by Credit Karma. The email displayed a hand holding a stack of cash to validate to its customer that having their balances in a Credit Karma account was a positive choice to build their savings.

Marcus took a different approach to maintain loyalty and motivate customers to add funds to existing accounts. They launched a Q4 campaign that offered a $100 bonus to savings customers if they deposited $10,000 or more in new funds.

Lastly, Competiscan expects saving tools to continue as a key area of emphasis. Automatic transfers, savings boosters, and programs like Bank of America’s Keep the Change will steadily appear in marketing messaging. These tools will assist financial institutions when promoting the ways in which they can help customers capitalize on current rates and grow balances.

In closing, the increase in high-yield accounts is predicted to drive heightened competition in 2023, and a new opportunity has emerged for account generation and banking relationships to begin through a product other than checking. Despite all of that positive excitement, engagement with existing deposit customers will be equally important. Financial institutions may be challenged to maintain deposit relationships while consumers rate shop, and communicating the benefits of existing products and relationships will be pivotal for retention.

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