THE HIGHEST PRICED BUSINESS BUNDLE

It might be us, but it seems like captchas, those two question internet challenge riddles that make sure you are not a computer, are getting harder. Last week, we might have stumbled on the world's most difficult one (see graphic) from the largest concert ticket site. There has to be a better way, as this one was indecipherable and actually required a computer to understand. The other thing we stumbled on is a new business account offering by Chase. Usually, this wouldn't merit reporting, however, this BusinessPlatinum Checking bundle now holds the position as America's most expensive account package (surpassing a similar offering by Bank of America introduced a few years ago). Chase is currently testing this account in selected states, but it is an interesting experiment for all to watch to get a sense of fee sensitivity at mid-sized businesses. The account comes with a $95 per month fee, which is almost 3x the $30 monthly fee most banks charge for a premium bundle and 5x more costly than the average checking package. The fee can be waived with combined balances of $100k, which also seems to be the highest combined balance requirement in the land. For that price, the account holder gets the following at no charge: 1 NSF and 1 OD fee waiver per month, non-network ATM usage, checks (regular, travelers & cashier), money orders, stop payments, no fee gift cards, online banking/bill pay, foreign/domestic wires, a bonus rate on a linked savings account and a reduced rate on a business line of credit. The account comes with 250 free transactions and a $0.40 charge for transactions over that number. Compared to most community bank premium business packages, this one doesn't stack up too well. Your average community bank would likely charge $35 per month and give the business up to 400 transactions free. What community banks normally don't give businesses are free gift cards, money orders, reduced fee line of credit or traveler checks; but we are not sure that is worth the $60 per month difference. All that said, the advantage of a premium business bundle is not in the fees they generate (although most are usually profitable on the fees alone), but in the non-interest sensitive balances they bring to a bank. For most banks, only about 35% of the premium accounts end up paying a fee, with the rest offsetting fees with combined or average balances. More than almost any other account, premium business customers have a tendency to leave higher than average balances, making them the highest group of users in profitability by a wide margin. While we are not advocating going out with a premium package priced at $95 per month, but are strong believers that more community banks need to introduce a premium account package in order to boost profitability. Similar to our lack of understanding on captchas, these two questions have perplexed us for several years - What is the most profitable core account (answer: premium business package) and what is the one business package that most community banks don't have (answer: the premium business package). Unlike a captcha, no computer is needed to solve this riddle.