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Age Trumps Income When Targeting Checking Account Consumers

Tuesday, November 19, 2013 - 7:38 AM
Traditional market segmentation for the banking industry is usually based on income. But for bank shoppers, age is better than income as a predictor of checking account requirements, behavior and attitudes about different banking channels.

Age Trumps Income When Targeting Checking Account Consumers
5
ShorebreakShorebreak2,371 posts since
Apr 6, 2010
Rep Points: 12,648
1. Tuesday, November 19, 2013 - 5:27 PM
"In a recent survey on FindABetterBank, 63% of respondents over 40 years old reported daily checking account balances of more than $5000, but only 37% of those with income of $150,000 or more carry such high checking account balances."

Ok, who in her/his right mind would put $5K in a 0% checking account?  I think those 63% of the over-40-year-old people are simply too tired to move those fund into a higher-yield financial products.:D

 
3
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
2. Tuesday, November 19, 2013 - 6:43 PM
Who???   I do!  With interest rates this low sometimes I prefere having a larger amount of money nearby where I can get to it quickly.  Then again you did post "in their right mine".  Were you calling my name? :)
1
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,093
3. Tuesday, November 19, 2013 - 7:05 PM
Ok, you fits in the 63% of over-40-year-olds or the 37% with $150K.  Congrats.  :-)

But you don't do it all the time (losing interest like that), right?  :D

I don't mean disrespect for that group, but what a waste of the $5K fund for the long term.  If I want such fund in short time, I will transfer from my 3-4% RCA within a day or so (or write a check) and take care of it.
2
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
4. Tuesday, November 19, 2013 - 7:28 PM
Oh my goodness.  You have put me in a terrible position.  I need to decide whether to divulge my age or my wealth.  Why do only 37% have just $150K?  That is the real concern here.  I also didn't know there were 63% of us over 40 years old.  I thought we had less in our group.  Now you know both my age and my finances.  Like anyone really cares. :) 

I am touched that you are so concerned about our group losing interest like that and no I don't do it very often.  I also cannot do the RCA thingee.  It makes me nuts to just think about all the stuff it entails.  I would rather drive 200 miles to find a bank or cu to get 2% than do an RCA. I am very happy that you and my other posters can take advantage of such good rates tho.  I did do the Penfed thing today over the phone and it didn't even cost me any gas!  Thank you Ken for finding those great 2% rates for us!! 
1
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,093
5. Tuesday, November 19, 2013 - 9:34 PM
Unless you're below 40; we all belong to the over-40 category.  As for $150K, 37% of that group (earning $150 or more) have a checking balance of at least $5K.  So, no need to reveal one's age or income at all.:-)

I don't blame you for disliking the RCA chores at all.  Actually I am quite sick with the RCA requirements myself and almost wish my RCAs would drop rate to release me sooner:-) (Be careful what I wish for:D)

But I am doing multiple RCAs.  1-2 RCAs ($50K at 3%) will not be that bad.  Actually every RCA requirement can be done online within minutes.  ACH is set up automatically.  Debit transactions can be done by paying multiple utility payments (Verizon, AT&T, T-Mobile, etc.) online.  Amazon Payment or Serve are even faster.  Instead of 2% CD that is not liquid, you can get at least as good; if not 3% or more.  Then one uses those RCAs for BillPay, check-writing, getting cash at ATM with fees fully refunded every month.  There is no monthly fee or other junk fees to worry about.  By duty, one has to examine one's RCAs frequently (for requirements); thus to prevent frauds as well.  It is much better than standard checking (with minimum balance or monthly fees) as primary checking account.  I think that RCA will still beat CD (both in rate and in liquidity) in the next few years.  Just my own experience of RCAs for your reference only:-)
3
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
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