A few days ago, I received a press release from the marketing company representing the First National Bank of Omaha, which recently created FNBO Direct to compete with online outfits like ING Direct and HSBC Direct.
The new FNBO Direct account, with no minimums and no fees, offers 6.0% APY through September 28. The big question is what will the rate be after that time and whether they will still be significant competitors with HSBC Direct’s 5.05% APY. There has been some discussion about FNBO Direct already thanks mainly to a media push by the company, and you can check pfblogs.org to find those articles. I find it unlikely that I’ll open an account as the difference in current APY isn’t worth the risk to me of changing banks whenever a new one pops up with an expiring deal.
For those who are interested, here is the full press release.
NEW INTERNET BANK WITH 6.00% APY ONLINE SAVINGS ACCOUNT (OSA) LAUNCHED BY FIRST NATIONAL BANK OF OMAHA
New OSA, with no minimums, enables Internet banking customers to start saving at more than 10x the national traditional savings average
OMAHA, Neb — MAY 21, 2007 — First National Bank of Omaha, member FDIC, a subsidiary of First National of Nebraska, Inc., the largest private banking company in the United States, today launched its new Internet bank – FNBO Direct – to establish a national presence in the $120 billion Online Savings Account market (1). FNBO Direct is entering the market with a 6.00% APY (2) Online Savings Account (OSA), an industry high, with no fees or minimum balances required. Any and all account holders will receive the rate of 6.00% APY, today through September 28, 2007. Consumers can sign up for the FNBO Direct OSA online at www.fnbodirect.com/pr.
“This is an opportunity to compete with the large, national banks on their own turf, bringing a well-established, all-American bank to customers across the country,” said Rajive Johri, president and director, First National Bank of Omaha. “Not every investment-savvy consumer wants to invest his life savings with a large conglomerate bank. As the nation’s largest private banking company, we’re stepping up to the table with FNBO Direct, a new Internet banking option for consumers. And, we plan to win significant OSA market share.”
FNBO Direct provides a low-risk Online Savings Account (OSA) for investors looking for a safe place to invest their money. The uncertainty surrounding the future of social security benefits, recessionary fears and stock market volatility are among the economic indicators that have encouraged more and more investors to consider cash as a way to diversify their portfolios. With FNBO Direct, consumers can go online and sign up for an OSA with no minimums, today, and start saving at more than 10 times (3) the national average. (www.fnbodirect.com/pr)
“Attracting and retaining Internet banking customers requires being near the top of the list of rates offered at any given time,” said Johri. “With our 6.00% APY, FNBO Direct is currently the most competitive OSA on the market.”
To ensure high levels of customer service, FNBO Direct provides its Internet banking customers with call center support 24 hours a day, seven days a week.
“Consumers are increasingly looking to invest their money in online savings accounts as their experience with ecommerce matures and they recognize the significant rate advantage provided by these accounts,” said George Tubin, research director, TowerGroup. “While competitive rates may initially attract new customers, Internet banks must provide exemplary service and the online banking features that customers demand.”
Multimedia Elements
* Listen to a podcast about the benefits of an Online Savings Account (OSA), featuring Rajive Johri, president and director, First National Bank of Omaha; and George Tubin, research director, TowerGroup. Cut and paste this link: http://spe.atdmt.com/lp/fnbo/FNBODirect_podcast.mp3
* View FNBO Direct’s advertising campaign: www.fnbodirect.com/pr/mkt
* Link to the FNBO Direct del.icio.us page for more industry information about Online Savings Accounts: http://del.icio.us/FNBO_Direct
About FNBO Direct
FNBO Direct (www.fnbodirect.com/pr) is an Internet bank that offers consumers innovative online banking products. Its first offering is a high-yield Online Savings Account (OSA). FNBO Direct is part of First National Bank of Omaha, a subsidiary of First National of Nebraska, Inc., the largest private banking company in the United States. First National Bank of Omaha and its affiliates serve more than 6.6 million customers in all 50 states, with more than 90 banking locations in Nebraska, Colorado, Illinois, Iowa, Kansas, South Dakota and Texas.
Footnotes:
1 – Financial research and consulting firm Celent estimates that $120 billion in deposits were gathered online as of the end of 2005 and expects that figure to more than triple to $380 billion by 2010.
2 – This Annual Percentage Yield is accurate as of 5/18/2007. Rates may change after the account is opened, but we will not change rates until September 28, 2007 on deposits that are accepted before the rates are changed. Fees may reduce earnings. Minimum balance to open an account is $1.00. Maximum principal deposit balance: $1,000,000. See the Disclosures for additional information and limitations.
3 – According to Bankrate.com, the average yield on statement savings accounts dropped 8 basis points to 0.46 percent since fall of 2006.
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