People are strange. Yeah, I’m talking about you. And me. And everyone I know. Why do we do the things we do, or not do the things we should?

Why do I still have trouble remembering to floss my teeth? I get lectured about it every six months and I know it will help me keep my teeth for a long time. But, it’s such a chore.

Why do I eat an entire pint of ice cream in one sitting when I know I’m going to have a stomach ache and feel like a slob later? Because I deserve it! I had hard day.

Personal finance is no different. We know we need to live below our means and make smart decisions with our money, but it doesn’t always happen. If you were presented with an alternative to your current checking account that would pay you a higher interest rate and refund any ATM fees you may incur, would you switch? Of course I’m talking about our Velocity Checking account, and the obvious answer to me is yes. But here are a few snippets of recent conversations I had with friends when I told them about the account:

Friend 1: You don’t have a branch near me.

Me: Oh, do you visit a branch often?

Friend: Never.

Me: So, why does it matter?

Friend: I just don’t want to switch because it’s too much of a hassle.

Me: Even though in the end you’ll be paid to switch?

Friend: But I’d have to switch over my direct deposit.

Me: We’ll pay you $25 to do that.

Friend: And then I’d have to change over my automatic payments.

Me: Well, why don’t you try baby steps? First, open an account and put some money in there. Then have a Relationship Manager help you figure out how to switch everything over.

Friend: Now it’s just too much pressure. You are stressing me out!

……

Friend 2: I don’t use my debit card 12 times a month.

Me: What do you do, write checks?

Friend: Yeah, or I use cash.

Me: Isn’t it unsafe to have that much cash on you?

Friend: Well, it’s safer than someone stealing my debit card.

Me: Velocity comes with a free ID Theft service, so if that were to happen, the credit union would take care of it for you.

Friend: I don’t want to have to figure out how many times I used my debit card in order to earn the dividend.

Me: All you have to do is hop on home banking. It takes less than five minutes. You’re online all day anyway, so what’s the big deal?

Friend: Am not.

Me: Are too.

……

Friend 3: I only have like $50 in my checking account.

Me: I can’t help you there.

……

A challenging part of my job is thinking I have a great product that will practically sell itself, only to realize that some people simply don’t care. Don’t get me wrong, I have plenty of friends who opened Velocity accounts as quickly as they could. It’s the other group that has me shaking my head in confusion. But, this is what dental hygienists have struggled with for decades: behavioral change!

So, for those of you resisting the lure of Velocity, what will it take to get you into this checking account today?

Terrell

No biography available for this author.

11 Responses

  1. Tim says:

    I want the floor mattes. And I am not willing to pay a penny extra.

  2. Brent Dixon says:

    Terrell, I said this on OSCU as well, but…

    I really dig this post – huge behavioral disconnects still exist even when you have a really incredible value proposition. It’s interesting to juxtapose that reality next to hearty and near-sighted CU idealism.

  3. Jeff Hardin says:

    Terrell –

    It’s kind of funny how this works … how many of us will drive across town to save 5 cents on a gallon of gas, but won’t switch into a banking product that is a big winner?!

    You may classify me as Friend #4, with the conversation looking something like this …

    T: Yep, you get a bodacious dividend on your deposits & get ATM fees refunded provided that you use your debit card and a few other things.

    J: OK, sign me up!

    T: Cool! Want to split a pint of Ben & Jerry’s?

    J: We could buy two.

  4. Terrell, buying psychology has nearly nothing to do with rationality and practicality. It is 100% “how does this make me feel about myself?” When you press your friends with follow up questions as to why they aren’t being smarter by making the switch, you are putting them on the defensive, to which they instantly rationalize their behaviour. I know you have the best of intentions, but you are forcing them into a corner (they are subconsciously thinking, “either I have to admit I’m stupid/illinformed for not having already made the switch, or I can make an excuse.”)

  5. Huffles says:

    One of the most attractive parts of the Velocity Checking Account is the high interest rate. Personally, I have no problem using the debit card 12x and getting electronic statements. I’d like to move some of my savings from another institution into my Velocity to take advantage of the relatively high interest rate. Is it possible to have 2 or more “sub accounts” within a Velocity Checking Account? I’d like to “forget about the savings,” so it doesn’t get spent. Alternatively, could you offer a more competitive rate on the linked savings account for those customers who meet the requirements for the 6.01% rate with the Velocity?

  6. Terrell says:

    Thanks for the comments!

    @Huffles. I forwarded your comment to a front line staff person who knows a little bit more about the ins and outs of the account structure. This is what he said:

    “While we don’t offer “sub accounts” to Velocity Checking earning the same 6.01% rate, we do offer options for members who want to help keep some of the funds separate or protect against potential fraudsters draining the entire balance. We are able to place a flat dollar hold/freeze on the checking account in any amount of their choosing. It would effectively change the available balance of the account, but they would still earn the 6.01% on the entire balance.

    Above $40,000, I would look at a Verity Money Market or short-term CD for the next best rates. While the savings and money market rates are set, there is some flexibility in CD rates in order to provide the best rate possible.”

    I hope that helps.

  7. Tony Mannor says:

    Terrell,

    I used to work for an old southern salesman when I was a kid. He gave me a bit of advice that has stuck with me for the past 18 years.

    “You can’t sell a band-aid to a man who aint bleeding.”

    I remember when I broke a tooth. I spent months talking about how much better I could have taken care of my teeth. Now, I a in there every 6 months, I floss regularly and so on.

    Some folks would rather deal with the minor inconvenience of fees or low rates than the time and effort it takes to switch accounts. Until they start bleeding.

  8. george says:

    Do you think the rate (6%) on the velocity checking will be dropping anytime soon due to all the fed cuts in the rate?

  9. Terrell says:

    Hi George,

    This rate will not stick around forever, but I can say with confidence that it will last through February and possibly into March at least.

    And while we will need to adjust it at some point, we aim to keep our Velocity rate one of the highest in the Seattle market.

  10. Tom says:

    I think this offer has one big problem: it’s almost too good to be true. So, it is easy to think that something must be wrong with a credit union that is so desperate to attract new deposits. Maybe it helps if you could give a reason WHY you are able (and willing) to offer such outstanding interest rates…

    Tom

  11. Ron Bensley, Jr. says:

    Terrell: Velocity Checking is so attractive I might up joining Verity Credit Union for it. I am part of the apparently small group of Americans who SAVE THEIR MONEY and who want their core checking-account spending money to stay ahead of inflation. Your product exceeds that standard!

    I will quietly and politely observe that credit unions are, for all intents and purposes, in competition with each other as well as with banks. Verity’s Velocity product seems “too good to be true”, yet BancVue indicates it has a proven track record for many banks and CUs.

    As someone who has heard many CU industry folks express skepticism about the viability of high-yield Reward Checking products, I certainly applaud Verity’s willingness to stand out from the crowd. Ron

Leave a Reply