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Savings Rates Soar.

In direct mail, banks promote rates well over 4%

CHICAGO -- Wondering what to do with your tax return check? You might want to look back in your mailbox. Mintel Comperemedia reports that in 2007, 86% of direct mail savings account offers(*) advertised rates between 4.01 and 5%. Even more, 10% of mailings(*) promoted rates above 5%.

"In recent years, rates have skyrocketed for savings, especially online accounts, making a high yield more the rule than the exception," comments Jenny Roock, director of research at Mintel Comperemedia. "Banks now offer high yield savings account rates that compete with those advertised for money market accounts and certificates of deposit."

In addition to impressive rates, Roock notes that many online high yield savings accounts offer another plus for consumers: low or no minimum deposit requirements. In 2007, 76% of direct mail savings offers did not list a minimum deposit amount, according to Mintel Comperemedia. Of those that did, a third (33%) required minimum deposits of $100 or less. Only 5% required deposits of more than $10,000.

"The lack of high minimum deposit requirements makes online high yield savings accounts accessible and beneficial for most consumers," states Roock. "With such profitable returns, high yield savings accounts are an excellent option for people saving for a rainy day."

The History of High Yield

Though savings rates above 4% are now common, as little as four years ago, they were unheard of. Mintel Comperemedia reports that in 2004, almost all direct mail offers for savings accounts (99%)(*) promoted rates of 3% or less. Even in 2005, two-thirds of mailings (67%)(*) advertised rates at 3% or under.

ING DIRECT single-handedly drove the change to higher rates with direct marketing for its online Orange Savings Account. Consistently the top direct mailer for savings, ING DIRECT was the first bank to offer above-average rates in its mail campaigns. In 2005, ING DIRECT stood out by promoting rates above 3% in one-fifth (21%) of its mail.(*) By 2007, almost all of ING DIRECT's direct mailings (99%)(*) advertised rates over 4%. Mintel Comperemedia's email-tracking panel shows that 94% of ING's 2007 savings account offers listed rates above 4% (when any rate was disclosed).

Other banks have since caught on and are now advertising their own online high yield savings products. Leading direct marketers such as GE and E*Trade promoted rates of only 4% and over in 2007 direct mail.(*) In emails collected by Mintel Comperemedia's email panel, E*Trade listed rates above 4% for all of its 2007 savings account offers (when any rate was disclosed).

(*)Percentages refer only to direct mail savings account offers that disclosed a rate. (In 2007, 13% of direct mail savings account offers did not disclose a rate.)

About Mintel

Mintel is a leading global supplier of consumer, product and media intelligence. For more than 35 years, Mintel has provided insight into key worldwide trends, offering unique data that directly impacts client success. Mintel Comperemedia is a competitive media monitoring service that analyzes direct mail, email and print advertising trends. With offices in Chicago, London, Belfast, Sydney and Shanghai, Mintel has forged a unique reputation as a world-renowned business brand. For more information on Mintel, please visit www.mintel.com.
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Publication:Business Wire
Date:Mar 13, 2008
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