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| Tuesday, March 14, 2006 |
| Switch Banks - Get a Free Portable DVD Player? |
 Today's Boston Globe has the story: Fewer banks offer big gifts to lure clients. While Eastern Bank is offering a 7-inch Polaroid DVD player (retails for $150) for customers who open select checking accounts, many other local banks have pulled back on promotions. Banks could afford to be generous with freebies a year ago. When the gap is wide between short- and long-term interest rates, banks thrive because they can borrow at the low rate, make loans at a higher rate, and pocket some of the difference as profit. But when the gap between rates narrows, profits get squeezed.
On March 14, 2005, 10-year interest rates were 0.77 percent higher than two-year rates, according to the US Treasury Department. As of last week, that spread had narrowed to 0.02 percent, and between January and early March, that spread was often a slightly negative number.
''Banks are between a rock and a hard place," said analyst Gerard Cassidy of RBC Capital Markets.
If you are thinking of switching banks and have been tempted by some of the gifts or other offers out there, it looks like you should jump on the offers and not wait - since they may not be around for long. For me? I am sticking with my old tried and true Credit Union. While I don't get things like fancy DVD players, I do get solid service, free checking, free ATM access (when using machines in the SUM network), free online banking, and free online bill pay. True, the interest rate is pretty low, but then I keep the bulk of my savings in online accounts which give me a high rate of return. But knowing that I can walk to my local credit union, be greeted by a teller who knows me, and have any questions or concerns answered immediately is worth more than a DVD player to me. |
| posted by Boston Gal @ 9:55 AM *
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| 1 Comments: |
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I wonder why people buy these 7 inch dvd players..
Would you watch a movie in a 7 inch TV? Ugh!
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I wonder why people buy these 7 inch dvd players..
Would you watch a movie in a 7 inch TV? Ugh!