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Bluestone Bank was ready to freshen up its checking account for teenagers and develop a product for even younger children this past summer. But the bank didn’t want to mimic what its competitors were offering.
“We knew we could do a better job than we were doing,” says Joe Mitchell, first senior vice president and retail banking officer at the Raynham, Mass., bank.
Bluestone went on to develop what it calls the Milestone account, a savings and checking product that evolves over time. The account gives children greater control and more options, such as access to Zelle, as they get older. Other sweeteners include a $25 account-opening bonus and a 5% interest rate on the first $500 in savings. The rate drops to 0.01% on balances above that.
The accounts, available to customers through the age of 23, aren’t designed to rake in deposits, however. They are intended to help Bluestone connect with young people, the ones who are most tempted by the ever-expanding range of digital banking competitors.
“We want the customers to get comfortable with us, to get to know the staff better and, in some ways, dare I say, create financial memories,” says Mitchell.
Bluestone Bank’s Milestone account is a creative approach, particularly given the interest rate it promises, says Glazer, who is also managing partner of Mayflower Advisors, an independent investment advisory in Boston.
“The best way to teach compound interest is to actually have a bank account that pays interest,” he says. “I think this is a good step and hopefully it’ll be something that other financial institutions embrace.”
Bluestone, which has assets of about $1.4 billion, introduced the Milestone account in August 2022. The bank promoted it through digital ads, search campaigns, email blasts, social media and even flyers stuffed into drive-through tubes by tellers who noticed children in a car.
The vast majority of new accounts, however, have come through word of mouth and staff interactions with customers, says Mitchell. “That would be something I consider a strength of our team here at Bluestone: reaching out to customers. They make a lot of phone calls for a lot of different reasons. Having something to offer or sell that’s a little unique or compelling is something they like to do.”
Beyond the initial hooks of the account-opening bonus and high interest rate, many of the other features change across four phases as account holders age, from birth to 12 (First Steps), 13 to 15 (Keeping Pace), 16 to 18 (Gaining Ground) and then 19 to 23 (Building Up).
Birthdays prompt a $10 bonus up to age 12, for example. Mobile banking and debit cards are available starting at age 13. Once account holders turn 18, they have access to Zelle. And at 19, they have the option of kicking their parents off the account.
Debit transactions, meanwhile, are limited to $250 per day for those between 13 and 15. The cap jumps to $1,000 per day for those between 16 and 23.
The changing parameters offer Bluestone an opportunity to build relationships. The bank sends a letter to customers when they move to the next stage and follows up with a phone call, Mitchell says. “We think that really, really makes a big difference.”
Reaching young people by phone hasn’t been easy, though. They prefer texting. “And that’s a challenge we haven’t been able to master,” says Mitchell, citing the confidentiality issues faced by financial institutions trying to text.
When Bluestone does get through, staff members discuss how the account is changing and share advice on how to take advantage of it. “We can actually educate you on how these things work, what to do, what to avoid for a variety of reasons,” says Mitchell, noting that young people are just as susceptible to fraud as other customers.
He declined to say how many accounts had been opened but offered a breakdown by phase. Roughly a third of Milestone account holders, or 33%, are in First Steps; 17% are in Keeping Pace; 35% are in Gaining Ground; and 14% are in the last phase, Building Up. When the account holder turns 24, they can opt to move into whichever Bluestone checking account they prefer.
Despite the intensifying competition on the digital front, Mitchell says he is confident Bluestone can retain its young Milestone account holders as the age and their needs evolve. He notes that when he talks to students at a local college as part of their coursework, most say that they still bank where their parents took them.
“If we are doing our job — building relationships, providing the proper service — we should be able to hang on to them,” he says.
“We knew we could do a better job than we were doing,” says Joe Mitchell, first senior vice president and retail banking officer at the Raynham, Mass., bank.
Bluestone went on to develop what it calls the Milestone account, a savings and checking product that evolves over time. The account gives children greater control and more options, such as access to Zelle, as they get older. Other sweeteners include a $25 account-opening bonus and a 5% interest rate on the first $500 in savings. The rate drops to 0.01% on balances above that.
The accounts, available to customers through the age of 23, aren’t designed to rake in deposits, however. They are intended to help Bluestone connect with young people, the ones who are most tempted by the ever-expanding range of digital banking competitors.
“We want the customers to get comfortable with us, to get to know the staff better and, in some ways, dare I say, create financial memories,” says Mitchell.
Bluestone Bank’s Milestone account is a creative approach, particularly given the interest rate it promises, says Glazer, who is also managing partner of Mayflower Advisors, an independent investment advisory in Boston.
“The best way to teach compound interest is to actually have a bank account that pays interest,” he says. “I think this is a good step and hopefully it’ll be something that other financial institutions embrace.”
Bluestone, which has assets of about $1.4 billion, introduced the Milestone account in August 2022. The bank promoted it through digital ads, search campaigns, email blasts, social media and even flyers stuffed into drive-through tubes by tellers who noticed children in a car.
The vast majority of new accounts, however, have come through word of mouth and staff interactions with customers, says Mitchell. “That would be something I consider a strength of our team here at Bluestone: reaching out to customers. They make a lot of phone calls for a lot of different reasons. Having something to offer or sell that’s a little unique or compelling is something they like to do.”
Beyond the initial hooks of the account-opening bonus and high interest rate, many of the other features change across four phases as account holders age, from birth to 12 (First Steps), 13 to 15 (Keeping Pace), 16 to 18 (Gaining Ground) and then 19 to 23 (Building Up).
Birthdays prompt a $10 bonus up to age 12, for example. Mobile banking and debit cards are available starting at age 13. Once account holders turn 18, they have access to Zelle. And at 19, they have the option of kicking their parents off the account.
Debit transactions, meanwhile, are limited to $250 per day for those between 13 and 15. The cap jumps to $1,000 per day for those between 16 and 23.
The changing parameters offer Bluestone an opportunity to build relationships. The bank sends a letter to customers when they move to the next stage and follows up with a phone call, Mitchell says. “We think that really, really makes a big difference.”
Reaching young people by phone hasn’t been easy, though. They prefer texting. “And that’s a challenge we haven’t been able to master,” says Mitchell, citing the confidentiality issues faced by financial institutions trying to text.
When Bluestone does get through, staff members discuss how the account is changing and share advice on how to take advantage of it. “We can actually educate you on how these things work, what to do, what to avoid for a variety of reasons,” says Mitchell, noting that young people are just as susceptible to fraud as other customers.
He declined to say how many accounts had been opened but offered a breakdown by phase. Roughly a third of Milestone account holders, or 33%, are in First Steps; 17% are in Keeping Pace; 35% are in Gaining Ground; and 14% are in the last phase, Building Up. When the account holder turns 24, they can opt to move into whichever Bluestone checking account they prefer.
Despite the intensifying competition on the digital front, Mitchell says he is confident Bluestone can retain its young Milestone account holders as the age and their needs evolve. He notes that when he talks to students at a local college as part of their coursework, most say that they still bank where their parents took them.
“If we are doing our job — building relationships, providing the proper service — we should be able to hang on to them,” he says.