Radius bundles savings and debit rewards to build brand and deposit base
In a bid to grow its deposit base, digital-only Radius Bank is folding debit-based rewards and high-yield savings into one product called Rewards Checking. The account offers 1% cash back on debit transactions and up to 1.2% APY on savings. To access the savings, however, customers need to keep at least $2,500 in their rewards checking account.
Radius has been the partner bank for many financial startups in recent years, including Stackin and NorthOne. While partnerships extend Radius’ reach, the Rewards Checking product helps Radius build its own brand while growing its deposit base. It’s a strategy Green Dot, which also partners with fintech startups, is pursuing with its Unlimited account, launched in July. Green Dot offers 3% cash back on debit-based rewards for online and in-app transactions and 3% interest on savings balances up to $10,000.
Green Dot and Radius, however, are competing with other digital-only banks like Varo and MoneyLion, which offers debit-based rewards and high-yield savings products. With Rewards Checking, Radius is aiming to own customers’ primary banking relationships so it can use the data to offer a more personalized banking experience.