money in the bank

Ask around, and just about everyone has a story of bad service from a bank.  Here’s mine:  one Friday I was departing on a trip for the weekend, and noticed the only cash I had on me was a single $100 bill (I have long since forgotten how I came to be in such a situation, but there it is).  At the time, I remembered there was a branch of Chevy Chase FSB (transforming into the credit card viking ship on September 7) at the mall by where I was.  I went into the branch, waited briefly in line, then asked the teller if I could have 5 $20 bills for the c-note.  She asked me what my account number was.  Believing for a moment that she must have misunderstood my request, I repeated, “No, I am not depositing it.  I would just like some change, please.”  She responded with a tone that said, “I know what you asked for” while her words were “Yes, sir.  But you need to be an account holder here in order for me to make change.”

As the kids say these days, “Why The Face?”

I assured her the funds were not counterfeit (like she cared about Chevy Chase FSB taking a bad bill), asked her to verify that, and let me speak to a manager.  A five minute conversation with the manager ensued, in which the manager defended, then promptly abandoned the bank’s policy of not changing bills for non-account holders, and I was on my way.

This occured just over twenty years ago.

When you think about the number of depositors and accounts out there, there really are a lot of banks.  I think the future of banking is to completely abandon the idea of winning business through interest rates on deposits, a traditional line of marketing for them.  No one expects to make any money on bank deposits any more, so no one will be impressed by 0.3% versus 0.15% on a money market fund.

The idea of banking as a completely service-driven (not product-driven) enterprise is the future, at least as far as individuals are concerned.  Find the bank that understands your service needs, provides them at a reasonable cost, and you are set up for a better experience.  Sometimes that cost may be an opportunity cost ($50k in the bank making nothing costs you probably $1500 per year over what a bond fund could earn), sometimes it may be in the form of fees.  Know what the cost is, decide if you want to pay it, and act accordingly.

Next time I need change, I will make sure I ask the guy at the shoe repair place next door to the bank. He would have been happy to unload his 10s and 20s for a Benjamin.