LAUREL, Md.-After more than two-and-a-half years, Tower FCU is retiring its Cash Back Direct Deposit program, which paid as much as $125 for members who set up a new checking account with direct deposit ("Tower FCU Finds Cash Still King," Jan. 31, 2011).

The promotion paid $125 to members who opened a new checking account with direct deposit and $100 to members who moved their direct deposit relationship over to the credit union. Patricia Wagaman, VP of advertising and PR, said that the program helped push the CU's direct deposit penetration rate into the 60% range.

Tower Federal had 3,607 members with direct deposit when the program began in 2007; by the time it concluded in July of this year, 16,776 members had set up direct deposit. TFCU averaged about a 26% year-over-year increase on new qualifying direct deposit accounts. Today it has 63% penetration with checking and 46% with direct deposit, as opposed to 58% and 44%, respectively, when the promotion began. Not all direct deposits were eligible for the cash bonus, such as child support and alimony payments.

"The results show the campaign was successful in building long-term relationships by bringing in new direct deposits to new and existing checking accounts and increasing checking account penetration," said Wagaman.

And, she added, it reinforced the old motto that cash is king.

"We found that cash incentives work," said Wagaman. "People like to have their rewards in hand, so that's why we also have a 1% cash rewards credit card. ...So would we go to something else? I don't know."

She added that Tower could reintroduce the campaign at a later date if it needed to increase its direct deposit penetration.

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