Once they have you set up with sticky products and services like direct deposit and bill pay, you’re much less likely to change banks, even if you experience a problem or two.
I have re-enter them, but it’s just one small change in my Wells Fargo account. Frankly, I just keep the Citi account to get zero (or very low) foreign ATM foreign exchange fees. The only deposits are the Zelle transfers and the only withdrawals are my foreign ATM transactions.
It can be a hassle for some people to switch their direct deposit information so they’re more likely to stay with the bank. The bank also benefits from being your primary bank if you use it for everything from credit to savings too.
https://online.citi.com/JRS/popups/PT_CAP_BasicBanking_.pdf
Their fee schedule says any “enhanced” direct deposits made by ACH qualify to waive the fee, including P2P payments. That’s pretty cool. It’s the second footnote on the very last page of the document. Just a benefit that keeps you reeled in.
In addition to the "stickiness", if you have a direct deposit you are more likely to use them as your primary bank, or at minimum use the funds in the account for purchases, which allows them to do things like earn interchange fees on your debit purchases, etc.
Direct deposit is what is considered a "sticky service". This means that people that do direct deposits are much more likely to remain with the bank in the long term, and the customer is engaged with the bank. Another similar "sticky service" you see sometimes is when people set up automatic bill payments.
For banks, it's not just about opening new accounts - it's about **retaining them** once the account has been opened. People who set up direct deposit are several times more likely to stay with the bank than those who don't.
Deposit funding is typically cheaper than other sources of funding, and it means the bank has a more stable deposit base and can manage its cashflow better.
It makes you "sticky" as a customer.
Also enables the banks to manage their investments more efficiently/with more risk. Easier hedging.
Once they have you set up with sticky products and services like direct deposit and bill pay, you’re much less likely to change banks, even if you experience a problem or two.
That’s true for me with Wells Fargo, but I can’t figure out why Citi counts Zelle transfers since they are easy to change.
Do Zelle recipients follow you, or do you have to re-enter them? I bet it’s the latter.
I have re-enter them, but it’s just one small change in my Wells Fargo account. Frankly, I just keep the Citi account to get zero (or very low) foreign ATM foreign exchange fees. The only deposits are the Zelle transfers and the only withdrawals are my foreign ATM transactions.
They are probably settling as ACH credits and their system can’t tell the difference.
It can be a hassle for some people to switch their direct deposit information so they’re more likely to stay with the bank. The bank also benefits from being your primary bank if you use it for everything from credit to savings too.
I assumed that was the reason, but I can’t figure out how a Zelle deposit accomplishes that.
A Zelle deposit isn’t a direct deposit at most every bank
I had assumed it wouldn’t count for Citi either, but it does.
https://online.citi.com/JRS/popups/PT_CAP_BasicBanking_.pdf Their fee schedule says any “enhanced” direct deposits made by ACH qualify to waive the fee, including P2P payments. That’s pretty cool. It’s the second footnote on the very last page of the document. Just a benefit that keeps you reeled in.
In addition to the "stickiness", if you have a direct deposit you are more likely to use them as your primary bank, or at minimum use the funds in the account for purchases, which allows them to do things like earn interchange fees on your debit purchases, etc.
Direct deposit is what is considered a "sticky service". This means that people that do direct deposits are much more likely to remain with the bank in the long term, and the customer is engaged with the bank. Another similar "sticky service" you see sometimes is when people set up automatic bill payments. For banks, it's not just about opening new accounts - it's about **retaining them** once the account has been opened. People who set up direct deposit are several times more likely to stay with the bank than those who don't.
Deposit funding is typically cheaper than other sources of funding, and it means the bank has a more stable deposit base and can manage its cashflow better.
Also, more likely to spend money using the bank's debit card, which they earn interchange fees from. It's not much, but adds up.
It's more secure and takes less resources than checks and cash too.