The banner ads are all over the Internet.
Recently, the marketing team at Ally Bank began aggressively marketing the checking account it launched in January 2010 – a free checking account. What’s strange is that for some reason they decided against naming it “Free Checking” or in the case of Ally Bank, “Free Checking with Interest.”
They named it “Interest Checking.”
Compared to a majority of free checking accounts on the market today, the Ally free checking account is superior in that it pays interest on any balance.
Since the word “free” is one of the most powerful words in marketing, it’s surprising that senior management elected not to use it to name the account or describe it on its website.
Still, that didn’t stop a good friend of mine from quickly closing his account at the local credit union and opening a new Ally Interest Checking account. When asked why, he told me “Not only will I earn more interest at Ally Bank, I can use any ATM in the country without paying an ATM fee. And if I’m charged a fee by another bank, my friends at Ally Bank will reimburse this fee.”
Of course, he’s a prime target for Ally Bank being a computer-savvy member of the Gen Y group.
Me, I’m sticking with my free checking account from my local credit union.
As for why senior management at Ally Bank elected to avoid using the word “free” to name their exciting checking account, I have an idea as to the reason.
In May, 2009, when Ally Bank launched its new online bank, it was paying some of the highest rates in the banking industry. This quickly became an issue for a large number of competitors in the industry. For some reason, they felt Ally Bank shouldn’t be allowed to pay such high rates given that the bank had originally been the GMAC Bank and that General Motors had been rescued by the government.
Apparently, these competitor banks got their banking lobbyists to complain to the appropriate folks in congress and it wasn’t long before senior management was asked to lower the rates to be more in line with the rates paid by the complaining banks.
After this incident, it’s my belief that perhaps senior management is very sensitive to the rates it pays, what it names its products, and how it markets its products and services to consumers.
Given all the media publicity surrounding the future of free checking and the fact that the four mega-banks have recently eliminated free checking from their product lines, senior management decided it was best to introduce free checking but not call it such or promote it as free.
But, one quick trip to the bank’s website landing page for free checking here, and you’ll quickly discover that the account is a free checking account – in fact, it’s actually better than a standard free checking account.
If you spend any time on the Internet, you’ll discover that the majority of marketing dollars spent by Ally Bank is on website banner ads. They are everywhere.
And Ally Bank isn’t the only online bank offering free checking.
Free checking is also available on the ING Direct website. Like Ally Bank, senior management at ING Direct decided against naming their new account Orange Free Checking.
Instead, their new free checking account goes by the name of Electric Orange Checking.
To me, this is proof that the free checking account isn’t headed for extinction but will be around for many years as it is the best value in checking accounts today.
You can read more about free checking at FreeCheckingInformation.com – an independent resource not owned or maintained by any bank or credit union or third-party vendor serving the financial services industry.