While most account holders are earning extraordinarily low savings rates, a cooperative of community banks and credit unions has rewarded a group of more than 300,000 consumers with a sizable chunk of collective interest earnings: more than $59 million.
That big sum is all part of Kasasa, a brand of high-yield checking and savings accounts available at a select network of financial institutions. Kasasa is backed by BancVue, a company that says its mission is "to help community financial institutions win the war against the mega-banks, and to provide you with the accounts and personal service you deserve." The company and the Kasasa network have made some headway in that so-called "war," too. More than 130 member institutions in 39 states offer the high-yield accounts.
I took a look at the Kasasa website, and it seems there are few downsides to these accounts. They're free. They have no minimum balance requirements. They even offer nationwide ATM fee refunds, too. In fact, the program has refunded nearly $5 million worth of ATM fees since its launch in 2009.
So, with all those perks and benefits, why aren't there more customers participating in the program? Banking habits are hard to break. Consumers have grown very frustrated with fees and poor customer service, but my blogging colleagues and I have all seen how much of a hassle it can be to switch banks.
More importantly, those big institutions still have big advertising budgets that drive home the benefits of banking with them. While I'm guessing the majority of account holders wouldn't turn down the opportunity to earn up to 4 percent interest, I'm also guessing that most consumers have never heard of Kasasa. Others may simply be uncertain about moving their money to smaller institutions.
What do you think of the program? Would you consider switching to a smaller bank to earn more interest?