Mark’s Minutes

Overdraft/NSF – An unflattering history

As long as I can remember there has always been a “penalty” associated with writing a bad check. Historically, there was a lot of work that was created when a check bounced. It might take an institution a few calls and even hours to resolve the problem.

After the implementation of Check 21 and the move from paper checks to digital imaging, the risk posed by NSF checks and the operational energy for processing went down.

But like everything, the cost institutions charge consumers for NSF (non sufficient funds) has increased over the years. Today the average is $26.58 according to Bankrate’s 2022 checking account and ATM fee study. Average is just that. On the low end some charge about $10 and others as much as $40 per occurrence!

Depending on which statistics you rely on, the annual amount of NSF/Overdraft fees are in excess of $10B annually! And that is what is at stake for banks and credit unions.

Government initiatives to eliminate junk fees

While many institutions have voluntarily started reducing these fees, many more are reacting as a result of the likelihood of government pressure. In October of 2022, the Biden-Harris Administration announced that they were taking action on “junk fees” (of which NSF/Overdraft is one).

These likely are part of the “exploitative or predatory fee” component in this initiative. They are described as “fees that far exceed the marginal cost of service they purport to cover.”

With all the improvements in process and productivity in the checking sphere, few can defend these fees. That’s why all the major banking firms are moving rapidly to re-write these programs.

Watch your competitor’s reaction to these changes

To believe that an institution can eliminate these fees from their products and happily move forward making significantly less margin is unrealistic. As these firms begin to reduce prices on these fees, they will inevitably have to increase prices of other items.

Pay close attention to your competitor’s checking product details. Not just the rate being quoted but all fees associated with the program.

How to leverage in your marketing efforts

According to The Financial Brand, the most important attribute for choosing a checking account was fees. If you are a value provider of financial services, you can likely win the war on the key areas that make up checking account fees by a simple comparison between your product and other major providers in your area.

Key fees to focus on would include:

• Monthly Charges
• Cost of Checks
• Overdraft Charges
• ATM Fees

Surprisingly, deposit rates were slightly lower in importance behind “convenient branches” in this 2020 survey. However, with the rate environment reaching new heights in 2023, deposit rates should quickly become a major focus in your advertising to aid in encouraging switching.

Thanks for joining me today!

For years, the standard approach to gaining new clients was to throw out an offer of Free Checking or a High-Rate Savings Account to capture consumer attention. But then everything changed. People invested heavily in the market and traditional savings products were pushed down by low loan rates and a non-traditional Fed policy.

Stock Portfolio Losses Have Hurt Average Investors

After the record market correction in September that wiped out 22% of the average portfolio, people are clearly looking for safety in their investments. And while they aren’t taking everything out of their brokerage accounts, they are balancing what they have and being more critical about where they put their new “investment” money.

What People Want Right Now is a Safe Haven

Throughout the years leading up to 2022 savings rates were routinely below 1%. Most longer-term CDs and other savings vehicles left savers with little earning potential. Now with market corrections and Fed rate increases, savings products are much more appealing. One-year CDs are now showing rates in excess of 4% nationally and may go higher!

Retirement products (IRAs/Roth IRAs/Annuities/401K) are always top of mind during the first 3 – 4 months of every year as taxpayers review their current income and estimated tax liability. Their radar is focused on two things:

1.) How can I lower my current 2022 tax liability or improve my refund? (immediate gratification)

2.) How can I generate safety and a reasonable return going forward? (risk avoidance and investment return)

Traditional savings products are the answer!

New Product Strategies for IRAs will Drive New Accounts and New Money

Most institutions are not leveraging their creativity when they promote IRAs. In fact, they don’t even talk of the benefits they just announce, “We have IRAs and here is our rate.” Imagine how far that gets you with any other consumer product!

Adding more personality and product benefits to your IRA offerings will generate more interest and drive more traffic.

Consider some new ideas for this old standby (as an example): 

• The Safe Haven IRA – A high-rate IRA plus a checking account that auto deposits on next year’s IRA. The consumer can adjust how much they want to contribute each month based on their current circumstance…more or less depending how much they have available.

• The Bonus IRA – A high-rate IRA with a kicker for bringing in new money from another institution. A free checking account/debit card rounds out the package.


It’s time to dust off your IRA, get your creative juices focused on a powerful concept and get your fair share of this business. It’s a great source of new money and new relationships.

Now is an opportune time to take a fresh look at enhancing your deposit product offerings and grow your account holder financial security! Please let us know how we can help!

It’s no secret that the financial equilibrium is in flux right now. The Fed continues to ratchet up rates and the stock market is in disarray. Up one day and down the next. Nationally, interest rates on savings vehicles are up as high as 4% for 12-month CDs distributed by the aggressive internet banks. On the street, 2% is the absolute minimum to offer and maintain credibility.

Our clients are coming to us increasingly asking for help with deposit product promotional strategies. With the upward movement of rates, the public interest in the entire line of deposit products is going to grow. Time to dust off your new and improved checking accounts (maybe with newer and higher reward debit features?), your short to medium term CDs, and your retirement focused accounts (IRAs, Roth Savings, etc.)

Many experts are forecasting a recession and a corresponding rise in unemployment. This will likely result in downward pressure on the stock market, some dampening of lending and a move to safety.

With so much in flux, your marketing messaging should be about delivering security, clarity, and confidence to your consumers. Historically, when the market falls and recession is on the horizon, preservation of capital will be the primary goal for many.

What can you do now to help your consumers prepare?

Promote High Yield Checking and Savings in January and February. Historically, checking products have a higher consideration during the early months. With higher rates you can build a more competitive product offering. If you move quickly, you’ll be able to gain market share quickly. Imagine the results you’d see if you offered a 2 – 3% interest bearing checking or money market account? Promoting these items across the normal channels should build traction:
• In branch merchandising
• Outside banners, posters and window signs
• Digital and traditional advertising; Web features

Marketing during downturns is never easy. You’ll face a lot of pressure to decrease your marketing budgets and reduce your outreach.

It’s been proven that those companies that advertise during the recession are the ones that benefit the most once the recession ends.

Keep your wits about you. Now is your chance to shine!