These days I had to get acquainted with deposit tariffs of the leading national banks. You know, I had an impression that some at financial institutions they are made and written for anybody but an average depositor. As when there is a ‘deposit sheet’ with 10 or more names of deposits being open in front of my eyes or on the Internet, I simply become confused in such variety of bank offers.
In order not to make unsubstantiated statements, I am going to give some statistics of my research that I conducted at the beginning of June, 2008. So, out of 47 leading national banks:
- 8 banks (17%) offer a depositor a deposit program of 10 and more investments (in one bank I counted 16 kinds of deposits!!!);
- 10 banks (21%) – from 7 to 9 deposits;
- 7 banks (15%) – 6 kinds of deposits;
- 11 banks (23%) – 5 kinds of deposits;
- 6 banks (13%) – 4 deposits;
- 4 banks (9%) – 3 deposits;
- 1 bank (2%) – 2 deposits.
As we can see, at the present moment more than half of all banks (53%) are offering a depositor to choose a deposit instrument from six or more different kinds of deposits, and only 47% of the banks think that not more than 5 kinds are enough to satisfy the depositor’s needs.
How many kinds of deposits does the bank actually need in order to make it convenient and simple for a depositor to choose a deposit to satisfy their needs?
In my opinion, to reach this goal three kinds of deposits are enough for a bank:
1. Time deposits:
- paying the interest: monthly, at the end of the term, with capitalization, in advance;
- without the right to fulfill or withdraw in parts.
2. Accumulative deposits:
- paying the interest: monthly, with capitalization;
- with the right to fulfill and without the right to withdraw in parts.
3. Universal deposits:
- paying the interest: monthly, with capitalization;
- with the right to fulfill and withdraw in parts.
In the form of tariff net the given deposit line may look approximately like this (for one currency):
| Paying the interest | 1 month | 3 months | 6 months | 12 months | 18 months | Minimal amount of |
||
| deposit | fulfillment | withdrawal |
||||||
| 1. Time deposit |
||||||||
| In advance | % | % | % | % | 500 | |||
| Monthly | % | % | % | % | 500 | |||
| At the end of term | % | % | % | % | % | 500 | ||
| With capitalization | % | % | % | % | 500 | |||
| 2. Accumulative deposit |
||||||||
| Monthly | % | % | % | % | 500 | 250 | ||
| With capitalization | % | % | % | % | 500 | 250 | ||
| 3. Universal deposit |
||||||||
| Monthly | % | % | % | % | 500 | 250 | 250 |
|
| With capitalization | % | % | % | % | 500 | 250 | 250 |
|
In case if the bank wants to improve its deposit offer for a certain target group (pensioners, children, students, military people), you will not have to add one more deposit to the line increasing its length. It is simpler to make a deposit premium for this particular depositors to any of three kinds of deposits, and write about it under the tariffs.
May be, many bankers will not agree with my point of view concerning optimal number of deposits in a bank. I will be glad to discuss this topic in comments to this blog.
In any case, I would like to see that developing and implementing the new deposits or deposit programs the banks would always assess the novelties, in the first turn, from the point of their simplicity and convenience for a depositor (so called ‘usability’), and only then – from the side of effectiveness of marketing communications, or sales level increase.
