Banking: Wells Fargo, Chime, Empower banks fight for millennial accounts

By September 20, 2018Articles

Are you between 21 and 37? Please bank with us.

That’s the message millennials are hearing as the battle between the big banks and fintech companies for their hearts and deposits heats up.

The newest entrant in the fray – personal finance app Empower – upped the ante this week by rolling out its mobile bank services, including a fee-free checking account with rewards and a savings account that earns significant larger yields than at the big banks. The move comes shortly after Chase began dangling 60,000 rewards points to get more well-heeled young people to sign up for a premium checking account.

Other developments are afoot from traditional banks and fintechs, which use technology to improve the delivery of financial services. As the competition intensifies, that could mean more rewards, fewer fees and higher savings rates for these younger adults – and anyone else looking for a better banking experience.

“There’s an amazing opportunity to rethink what a bank is in the U.S.,” said Warren Hogarth, CEO and founder of Empower. “People are still paying $300 in fees and not getting a high interest rate on savings. People are frustrated.”

More rewarding banking

To deepen its relationship with holders of Sapphire Reserve credit cards – hugely popular among 20- and 30-somethings – Chase last week announced a premier checking account that features perks and rewards typically offered by premium credit cards. Among the benefits:

  • Access to Sapphire lounges at concerts and events
  • Access to pre-sale tickets
  • 60,000 free Ultimate Rewards after 90 days

Customers must maintain a minimum balance of $75,000 to get these perks, a large hurdle for the everyday person to clear. But the goal is to please people who want to feel “rewarded for the relationship they have with a bank,” said Dipti Kachru, who co-led the development of Sapphire Banking.

On the other end of the spectrum, Empower said its debit card users could earn 1 percent cash back, up to $10 each month.

And Stash, an investment app that’s working on expanding into banking services, plans to provide a debit card that can earn 10 percent back at 10,000 merchants, according to its website.

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