Fifth Third Bancorp in Cincinnati has begun offering low-cost deposit accounts aimed at helping retail customers avoid overdraft fees and access their paychecks sooner.
The $207 billion-asset Fifth Third will give customers extra time to replenish balances before an overdraft penalty is charged, post direct deposit payroll funds earlier than before and make advances against future direct deposits for a fee. It will also charge no monthly maintenance fee for the Momentum Banking checking or savings products.
Fifth Third joins a growing number of regional and large banks rolling out consumer deposit products designed to minimize fees. PNC Financial Services Group in Pittsburgh launched
Many fintech firms that offer retail banking services have staked their reputations on minimizing fees or offering faster access to funds, positioning themselves as a more consumer-friendly alternative to traditional banks.
“In some ways, I think the fintech world woke everybody up to this,” said Melissa Stevens, Fifth Third’s chief digital officer.
The company had previously offered some features of its new Momentum deposit products in certain of its markets, she said. For example, it had tested its Extra Time feature in its Southeastern markets to learn about how customers used it and how the bank could better communicate that feature to consumers, Stevens said.
That account feature alerts customers when they’re about to incur an overdraft fee and gives them one extra day to bring their balance up. Testing it in some markets allowed the bank to figure out how to better market it to customers, Stevens said.
The new product will have a feature called MyAdvance, which allows customers to take out an advance of $50 to $1,000 against their next direct deposit for a fee. Fifth Third had previously offered this feature under the name Early Access, and it had only offered it to those customers who had been with Fifth Third for at least a year. The newer iteration will be available to Momentum checking customers after two direct deposits.
Fifth Third will also offer Momentum customers immediate access to check deposits, as well as faster access to direct deposited paychecks. With the latter feature, Early Pay, Fifth Third will deposit customers’ payroll funds as soon as it receives the ACH files, up to two days early.
“Whenever we know you have money coming in, we’re going to give it to you, and we’re not going to charge you for it,” Stevens said. “Who says payday has to be on Friday?”
