So you are completely tired of having every bank America has at this time take you for granted. They keep your money, they give you little to show for it, and whatever they give you, they take back in the form of fees and charges for doing you the favor. The situation with badly-run banks has got so out of hand that even financial service companies are beginning to see the pointlessness of dealing with them. And over the last several months, there have been new kinds of financial services - part bank, part informal financial service - that have sprung up to take the place of what they consider is a failed financial concept - a regular deposit-taking retail bank.
The new services are provided by companies with names like SmartyPig and Perkstreet. They are advertising and offering interest rates and rewards that are so good, they wonder if they have somehow been transported to a time in the nifty-fifties when gas stations had full-service crews and banks actually appreciated your business. These new enterprises plan to completely take advantage of the absolute disgust that the financial crisis has brought up in people's minds for every established kind of financial service, and they are putting their best creative writers on the job, finding really uncharitable things about them to put in their advertising. In short, they are gunning for every established bank America runs. And it would appear that banks are on their way out, having failed their customers.
As aggressive as their posturing is, these new financial services need to admit that it's impossible for even them to offer the services they wish to, without having a bank backing them up behind the scenes and providing the banking logistics they need. Now here is the reason why you would want them on your side. Services like SmartyPig offer you a return on your savings bank deposits as high as 2% a year. That's about the best anyone has heard of in this miserable economy. But that's only as long as you carry a balance that is lower than $50,000; and if you let the company stock in a fixed deposit from some bank account you have every month. Apparently, this is such an attractive deal that about 50,000 customers of other banks rushed over to plunk down a collective quarter billion dollars in deposits right away. SmartyPig invests this money with an established bank on its own.
How on earth do services like SmartyPig earn their keep though? Perhaps we should explain the kind of business model Smartypig employes. They don't want you to just leave money with them. That's not what they make anything on. They ask you when you join to name the kind of financial goal you have in mind for the money you are putting together with them. If for instance, you say that you're saving for a good down payment on a new car, the moment you make the sum you need, they'll direct you to a retailer who do what you need. They earn their commissions over there. This is not any kind of bank America has ever seen before. It makes its profits on commissions.
PerkStreet's appropriately-named financial service does business, on the strength of a bank in the background backing up the money deals. Anytime you use a Perkstreet debit card to pay for this stuff, you earn a 2% rebate through gift cards they give you. Kasasa is a service that works with the smaller banks, and offers a 4% interest rate on its checking accounts. The banks earn a service fee on the debit card transactions customers make, and Kasasa makes a commission. Things are going well for now; but these services do understand that they can't really offer competitive technology and products unless you are a bank. And some of them one day will probably turn into the very bank America is always looked for an alternative to.