As big banks aim to attract business with checking account bonuses, a Pittsburgh ice cream store owner is hoping to entice consumers with a different kind of incentive.
Ethan Clay, the owner of Pittsburgh-based ice cream cafe Oh Yeah!, has opened Whalebone Cafe Bank, which currently pays depositors a sizable savings account rate: 5 percent. However, earning interest at Whalebone doesn't give you cash to spend on just anything. Instead, Whalebone account holders receive gift cards, which can be redeemed on sweets and coffee treats at the cafe.
In addition to the limited use of accrued interest, Whalebone lacks a crucial component -- Federal Deposit Insurance Corp. insurance. While bank fees and minimum balance requirements may be hurdles for some account holders, one of the key benefits of the mainstream banking industry is protecting your money. If Whalebone were to fail, where can its customers turn to get their money? Nowhere.
I did some research on this unconventional approach to banking, and it appears that the owner of Whalebone is one of the many customers who are frustrated with bank fees. The official website states that the first goal of this newly created "bank" is to end overdraft fees, and Twitter posts highlight anger with big banks and fees. Here are a few excerpts from recent tweets:
- "Bank regulators, divert your attention from Whalebone's status and focus instead on the predatory practices of the banks you 'regulate.'"
- "@FifthThird & all monster banks, how much does an overdraft fee actually cost you? How much revenue have you earned in overdraft fees?"
While I recognize that these fees have caused serious problems for account holders, there is a more simple solution to avoiding penalties for excessive withdrawals. Don't sign up for overdraft protection.
What do you think? Are you mad enough about bank fees that you would be willing to consider this type of radical alternative?