Deciding Between 4 1/2% and 4 1/2%

The month of May is a big month, as months go.

In the course of a three week period, I will celebrate one of life’s birthdays that one would sooner forget (yes, 30) and also raise a glass to a marriage that has lasted about three times longer than the U.S. average.

Today I received a bound edition of the New York Times from the year of my birth.

Among the things that caught my eye:

• Based on the ads, folks back in that day were big drinkers of Scotch and Bourbon. Or maybe it was the fact that May was National Tavern Month – a celebration I wish I was aware of before today.
• Saks Fifth Avenue had two-piece men’s suits for $57.50.
• Nussbaum’s had a special sale on 1954 Château d’Yquem Sauternes for $2.49 a bottle (no, that’s not a typo). Today that same bottle is available for $849.99

And, not unlike I am with any other paper, I was drawn to the business page.

It was there I saw the ads for bank CD rates – and they all offered the same rate: 4 1/2%

Remember, it was not until 1983 that bank time deposit rates became deregulated. As such, banks needed to find a way to gather assets, create value, and stand out in the sea of sameness on something other than price.

South Bay Savings in Chula Vista, CA advertised that they “supply complete airmail postage both ways!” – they were selling convenience. That said, you had to write to them for more information as they did not list a phone number in their ad!

Fidelity Federal appealed to your need for safety as their ad stated that “your funds are protected by our high ratio of reserves to savings, one of the nation’s highest.”

Personally, I like Van Nuys Savings. They appealed to the ‘freebie’ crowd and offered depositors a “beautiful 3 pc. Salad Set with Bowl, Salad Fork and Spoon by Wm. Rogers Silverplate for your new account of $500 or more.”

Silverplate – fancy.

Just as banks competed for your dollars with the exact same rate all those years ago, today you compete with a substantially similar product as a competitor. You have a comparable price, your service is too alike to tout as unique, and your firm’s brand value is mostly the same as the next guy’s.

So how do you stand out?

What makes you memorable?

What’s your MQ?

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