ANZ and Commonwealth offer new loyalty products
Banks have entered the modern marketing age with a vengeance, spurred on by competition from the likes of Aussie Home Loans, RAMS and FAI.
Although it took them a while to come to terms with consumer marketing, and while some haven't yet really grasped the real benefits of getting close to the customer, loyalty programs are taking off.
And it's not just frequent flyer points and competitions either, although these are becoming a regular feature of most bank's marketing campaigns.
The trouble with many of the competitions and give-aways is that they don't always build long term relationships between the banks and their customers. It's no good gaining a new client by offering a freebie or other give-away, if it doesn't give a reason to feel happy be a long term customer.
From a customer's point of view, loyalty incentives are terrific with three provisos:
1. Make sure that the total package is competitive and you are not being loyal to a non competitive product.
2. Is the reward for staying long term or short term? There is little point in changing the way you do your banking just for a one or two month promotion
3. Read the fine print and check out all the options.
Now two specific products new on the market:
ANZ Bank. High Flyer six month term deposits
ANZ are trying to make sure that you do all your banking with them. So if you have $10,000 to invest, you can get 2000 Qantas Frequent Flyer points by putting it into a six month term deposit with ANZ, and another 3000 points if you re-invest at the end of that term.
The more you invest, in amounts of $10,000, the more points you will earn.
The current interest rate is 4.40% payable on maturity, and the offer is open to both new and existing customers.
Sounds good? Well provided it suits you, it is, depending on a few factors:
1. Is the interest rate competitive, or could you fly faster with the added interest from another bank or institution? Well 4.40% for six months is pretty good, (as at 25th September ) and compares with the Commonwealth at 4.10% and National and Westpac at 4.0%. The best rates around are GIO at 4.50% and Metway at 4.55%.
2. 2000 points by themselves won't get you too far. You need 17,000 for a Sydney to Melbourne return flight. You need to be a Qantas Frequent Flyer, and earn points from other spending to take full advantage of the offer.
3. So just counting this offer, you'll need to deposit $90,000 for six months to fly immediately. A Sydney to Melbourne return economy fare will cost you $552, although if you book 21 days in advance and stay away a Saturday night, that could be as low as $230. Tickets purchased with frequent flyer points are not as flexible as full fare tickets.
4. So each $10,000 invested is worth between $25 and $61 in (tax free?) travel points depending on how you fly. Add that to the $220 you'll receive in interest to work out the real value of your deposit.
5. By opting for the Metway rate of 4.55%, you'll receive no points, and only get an added $7.50 in interest over the six month term.
6. You need to be a Qantas Frequent Flyer. If you always fly Ansett, or you don't use credit cards you might want to think again.
7. Do you absolutely hate flying? You might be better off taking the XPT
8. Does a six month term really suit you?
Next a new fee structure and rebate for Commonwealth Bank customers.
Everyone hates bank fees!! Having enjoyed fee free banking for years, the concept of actually having to pay to use a branch or ATM has really irritated many consumers.
However the reality is that most consumers pay far more in taxes on bank balances and transactions than they do in fees, but are probably resigned to taxes or don't realise the difference.
Commonwealth Bank's Transaction Fee Rebate Option
The Commonwealth has announced that if you are a customer with either deposits or borrowings with the Bank, you can receive a rebate of 50 cents per $500 of the total of all other accounts against your transaction fees.
If your loans and deposits total $30,000 or more, you will pay no fees on your transaction account.
Various groups who don't qualify for a full rebate, such as existing customers who are aged pensioners, or full time students over 18, receive a rebate of $4.50 per month towards their fees. Children under 18 or existing Complete Home Loan customers pay no fees. Read the fine print carefully, as it gets a little complicated.
The objective of the Commonwealth scheme is partly to give customers the choice of the type of account they want, and also to make sure that better customers have a reason for staying with the bank. It's not so much a way of offering fee free accounts, as giving good customers a reason for maintaining their overall relationship with the CBA.
Provided you qualify, and it suits your personal situation, make the most of it.