Banks try lavish bait to entice customers

Ratcheting up the bidding war for new customers, local banks are rolling out lavish promotions designed to entice people into their branches to open checking accounts.

Citizens Bank yesterday began testing a promotion that offers a free iPod mini or a $200 gift certificate to any person who opens a checking account with a $2,500 initial balance.

Sovereign Bank is in the midst of a $200,000 sweepstakes, offering customers who open certain types of checking accounts a chance to win five prizes, ranging from a $5,000 trip for two to London to the top prize of $100,000 in cash. The sweepstakes closes May 31 and the drawing is scheduled to take place shortly after.

Banks have been offering new customers coolers, folding chairs, beach towels, and small cash rewards for a couple of years, but competition has intensified since Bank of America Corp. took over FleetBoston Financial Corp last year. Promotions seem to be getting bigger and better and offered more frequently.

Eastern Bank has been offering a free companion airline ticket to new customers. TD Banknorth Inc., which caused a splash last year with its Ray Bourque bobblehead promotion, said yesterday it will stay open from 7 a.m. to 7 p.m. on Thursdays starting next week and offer special gifts to customers who come in on Thursday to do business. The gift next month is a $50 Visa gift card to customers who open a home equity loan or line of credit.

''It's just trying to get a customer's attention," said TD Banknorth spokeswoman Maria Wilson. ''Every bank is becoming pretty much the same. What can differentiate us is our service and also if we can offer customers something special."

Citizens, which has been publicizing a program that makes it easy for customers to shift over from a competitor, is now testing incentives that would spur customers to take the leap.

The iPod promotion has a fairly low profile during the test phase. Brochures explaining the promotion are available only in bank branches and the test will end on Saturday. If successful, bank officials say, it will be rolled out more broadly and backed with an advertising campaign.

''We're trying to see what the market is interested in," said Melodie Jackson, a spokeswoman for Citizens. ''Obviously, we think these are great gifts."

Geoffrey Rosenberg of Natick, who does a portion of his banking with Citizens, was blown away by the offer and said he intends to take advantage of it. ''From a consumer point of view, this is a wonderful, wonderful gimme," he said.

The promotion offers a free silver iPod mini or a $200 gift certificate to Home Depot or Best Buy to customers who open a Circle Gold checking account with direct deposit and an initial balance of $2,500. An iPod shuffle (Apple's new smaller music player) or a $100 Best Buy or Home Depot gift certificate is being given to customers who open a Circle Checking account with an initial balance of $1,000 and direct deposit.

Both Circle accounts have minimum balance requirements to avoid fees. The Circle Gold account requires a $20,000 combined balance with the bank to avoid a $20 monthly fee; the regular Circle accounts requires a $5,000 combined balance to avoid a $17.50 monthly fee.

Bruce Mohl can be reached at mohl@globe.com.