J.D. Power and Associates just announced findings from their 2010 Retail Bank New Account Study.
They looked at why we choose the banks we use, and how happy we are with them.
A major finding this year is that larger banks do a better job of getting your account, mostly due to promotions. iPods, $100 bonus deposits to your account, and promotional interest rates all help to seal the deal.
While the promotions are attractive, keep in mind that your bank account may be with you for a long time. It's probably better to choose a bank that you can have a long term relationship with. You may get $100 in gifts today, but it's easy to pay that much over a year in bank fees if you make the wrong choice. According to Michael Beird, director of the banking practice at J.D. Power and Associates:
"While offering a promotional gift, cash award or an attractive short-term interest rate may lead to increased selection by customers, it's important to keep in mind that the increased selection rate doesn't necessarily lead to an increased retention rate"
In other words, promotions bring you in the door, but you might not want to stay long.
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