Are you overwhelmed by too many checking and savings account options?
A new report from the Filene Research Institute, an organization that analyzes issues that impact credit unions, suggests that today’s plethora of banking choices may be too much for consumers.
While it’s easy to assume that customers prefer more choices, the report draws a connection between banking and grocery shopping. The research cites a study that found by reducing the amount of options on grocery shelves, customers actually spent more money. Filene suggests that by promoting fewer options at credit unions, members may be inclined to sign up for more products and and services.
This research was conducted specifically for credit unions, but I think the argument can certainly apply to banks, too. As minimum balance requirements have increased across the banking industry, the product offerings at banks and credit unions have expanded to include a lot of “ifs” and “ors.”
For example: “Monthly fee waived IF you make a qualifying direct deposit of $250 or more each statement period OR maintain an average minimum balance of $1,500.”
I’m guessing you’re fairly familiar with this type of disclaimer. It’s from Bank of America’s website, but you can find similar language on other banking sites.
On top of this type of either/or account, many banks offer packaged or bundled accounts. Consumers have the option to open a checking account with a savings account or a credit card at the same time. As product lines expand, many other questions can enter the decision-making process. Should you open that credit card account, too? Is that checking account bonus of $100 worth it? Does the ability to earn interest warrant higher minimum balance requirements?
My colleagues and I have covered just how confusing banking can be because of lengthy disclosure forms, and I’m curious if readers feel the same way about choosing between accounts. Are banks and credit unions offering too many choices? Would reducing the number of advertised accounts help simplify your life?