Coast Capital Introduces Canada's First Full Access, No Fee High Interest Savings Account

Wed Jan 7, 2009 11:42am EST

* Reuters is not responsible for the content in this press release.

  VANCOUVER, BRITISH COLUMBIA, Jan 07 (MARKET WIRE) -- 
The competition among financial institutions to woo customers signing up
for the newly introduced tax free savings account just got hotter with
Coast Capital Savings' introduction of the nation's first high interest
savings account offering full, no-strings-attached access to financial
transactions, for free.

    While Canadian financial institutions offer various types of high
interest savings accounts, these accounts either exclude popular features
such as debit card purchases and in-branch transactions, or where these
transactions are available, charge a fee-per-use of up to $5.

    Lloyd Craig, Coast Capital Savings' president and CEO, says the
High-interest, No-fee Savings Account gives customers full access to all
those common financial transactions at no cost, and will be particularly
attractive to those looking for a flexible way to take advantage of the
government's new tax free savings account, which became available January
1. The product can also be used as a regular savings account and for
registered products (e.g., RRSP, RRIF, RESP).

    "The new product from Coast Capital Savings offers a unique combination
of features including a high interest rate that is currently 2.75 per
cent and the ability to access your account how and when you want to,"
Craig said. "It includes unlimited day-to-day transactions like debit
card purchases and in-branch transactions, as well as withdrawals on
2,300 ATMs across Canada. The best part is that unlike other high
interest savings accounts, there are no service fees for all these
transactions."

    The introduction of the new Coast Capital product coincides with the
release of the results of a national Ipsos Reid survey commissioned by
the credit union that found that nearly 60 per cent of Canadians are
actively looking for ways to reduce service fees charged by financial
institutions and 65 per cent are paying more attention to service fees.
Also, 75 per cent of Canadians said they'd open an account with features
similar to Coast Capital's new savings account (See attached backgrounder
for more survey highlights).

    The interest rate on Coast Capital's new savings product places it in the
top-tier of high interest savings accounts in Canada, beating current
rates offered by the big five banks.

    Below is a chart that compares Coast Capital's High-interest, No-fee
Savings Account to similar accounts from three leading competitors, as of
January 7, 2009.


---------------------------------------------------------------------------
                Coast
Financial       Capital         Royal         Bank of
Institution     Savings         Bank          Montreal        ING
---------------------------------------------------------------------------
Account name    High-interest,  RBC           Premium         Investment
                No-fee          High Interest Rate            Savings
                Savings Account eSavings      Savings
---------------------------------------------------------------------------
Minimum $
 required for
 interest       $0              $0            $0              $0
---------------------------------------------------------------------------
Interest rate   2.75%           2.5%          Tiered,         2.7% (flat)
                                              0.75% to 1.75%,
                                              depending
                                              on balance
---------------------------------------------------------------------------
Monthly fee     $0              $0            $0              $0
---------------------------------------------------------------------------
Debit card
 purchases      $0              $5            Not available   Not available
---------------------------------------------------------------------------
In-branch
 withdrawals    $0              $5            $5              Not available
---------------------------------------------------------------------------
Home ATM
 withdrawals    $0              $5            Not applicable  $0
---------------------------------------------------------------------------


    Mike Bushore, Coast Capital's Chief Innovation Officer, said the
savings account is part of the financial institution's continuing focus
on meeting the ever-rising expectations of consumers.

    "Coast Capital's High-interest, No-fee Savings Account is another step in
our commitment to bring value and savings to customers," Bushore said.
"We know that the value proposition of this account will resonate very
strongly with customers and likely even more so, given that the current
economic climate is forcing everyone to take a closer look at how they
manage their money. Customers want a secure place to put their funds and
to be better able to manage expenses and we believe our new product will
deliver on our commitment to provide the public with simple financial
help."

    Bushore said the new product will also be appealing to small businesses
because it provides cost-savings on their day-to-day transactions, while
paying a rate that is higher than what is typically offered by financial
institutions on small business accounts.

    Coast Capital Savings' national Ipsos Reid survey, conducted in December
2008, revealed 62 per cent of Canadians are more likely to open a tax
free savings account because of current economic conditions. At 68 per
cent, B.C. residents are even more likely to do so, compared to other
Canadians. Among Canadians likely to open a tax free savings account, the
most preferred product for the account was a high interest savings
account, at 48 per cent. British Columbia residents were even more likely
than other Canadians to select a high interest savings product for the
tax free savings account, at 55 per cent.

    "Our survey shows 56 per cent of Canadians are planning to save more, in
case they or another income earner in their household loses their job,
and among British Columbians the figure is 63 per cent," said Lawrie
Ferguson, Coast Capital's senior vice president, marketing, adding that
75 per cent of Canadians indicated a high interest savings account would
motivate them to save more.

    "Clearly, given the current market uncertainties, many Canadians are fast
beginning to realize the importance of having secure savings and
investments and so combining the benefits of the tax free savings account
with a product like ours makes it an even more attractive choice for the
consumer," Ferguson said.

    The Ipsos Reid survey of 906 Canadians (effective base size of 516 due to
weighting) has a margin of error of plus or minus 4.3 per cent, nineteen
times out of twenty. The B.C. sample of 463 respondents has a margin of
error of plus or minus 4.6 per cent, nineteen times out of twenty.

    Coast Capital Savings is Canada's second largest credit union with total
assets under administration of $11.9 billion, 380,000 members and 51
branches in the Metro Vancouver, Fraser Valley and Vancouver Island
regions of British Columbia. Product innovations from Coast Capital
Savings include Canada's first free chequing account from a full-service
financial institution and the first business account in the country to
offer unlimited transactions for a flat fee. The credit union was named
one of BC's Top 50 Employers in 2009, is one of Canada's 50 Best Managed
Companies and the recipient of the Canadian Co-operative Association
Innovations in Co-operative Governance Award. Coast Capital Savings has
also been designated a Caring Company by Imagine Canada. To learn more,
visit www.coastcapitalsavings.com.

    Note to editors/reporters: Survey backgrounder attached. Coast Capital
spokespersons, customers and sources from Ipsos Reid are available for
interviews on request.

    For more information or to arrange interviews, please see contact
information below.

    Backgrounder

    National Ipsos Reid Economic Conditions Survey, commissioned by Coast
Capital Savings


Survey date:              December 9 to 15, 2008
Sample demographic:       Canadians 25 to 54 years old, with a savings or
                          chequing account
National sample size:     906 (effective base size of 516 due to weighting)
National margin of error: Plus or minus 4.3 per cent, nineteen times out of
                          twenty
B.C. sample size:         463
B.C. margin of error:     Plus or minus 4.6 per cent, nineteen times out of
                          twenty


    Survey highlights

    Fees

    - 65 per cent of Canadians say they are paying more attention to service
fees they are being charged by financial institutions.

    - Compared to a general high interest savings account, many more
Canadians are likely to open a no-fee high interest savings account. When
described as "a high interest savings account that has no service fees,
regardless of the balance you keep in that account and without any other
conditions", three-quarters of Canadians or 75 per cent indicate they
would open this account. This is comprised of 26 per cent who would
probably open this account and 49 per cent who would definitely open one.

    - Canadians (59 per cent) are actively looking for ways to reduce service
fees they are being charged by financial institutions. Many Canadians (52
per cent) have changed or plan to change how financial transactions are
conducted to reduce service fees. Forty-three per cent of Canadians have
reduced or plan to reduce the number of financial transactions conducted
to reduce service fees.

    Savings attitudes/habits

    - Higher interest rates would motivate Canadians to save more money.
Three-quarters of Canadians (75 per cent) agree with the statement "If
savings accounts offered higher interest rates, it would encourage me to
save more money than I do right now". This comprises of 44 per cent who
agree somewhat with the statement and 31 per cent who strongly agreed.

    - Fifty-six per cent of Canadians said they will save more in case they
and/or another wage earner in household loses job. At 63 per cent, B.C.
residents are more likely to save for this scenario. - Fifty-three per
cent of those who save specifically for emergencies or just in case
situations have less than $5,000. One-in-five or 19 per cent have savings
valued between $5,000 and $9,999 and one-in-ten or 10 per cent have
savings valued between $10,000 and $24,999. Only a few (6 per cent) have
savings of $25,000 and upwards while the others (12 per cent) are either
unsure or uncomfortable with answering this question. British Columbians
are slightly more likely to have savings between $10,000 and $24,999 (16
per cent versus 9 per cent for the rest of Canada).

    Tax Free Savings Account

    - The majority of Canadians are aware of the tax free savings account and
most are likely to open the account when it becomes available. Fifty-four
per cent of Canadians were aware of the account while 42 per cent were
unaware. Four per cent were unsure.

    - Regionally, those living in B.C. are more likely to be aware of the tax
free savings account - 66 per cent, versus 52 per cent for the rest of
Canada. Further, when asked about their likelihood to open the account,
48 per cent indicate they will open one. Thirty-three per cent are on the
fence, saying they might or might not open one, while 13 per cent
indicate they will not be opening this account when it becomes available.
6 per cent are unsure.

    - 62 per cent of Canadians are more likely to open a tax free savings
account because of current economic conditions. At 68 per cent, B.C.
residents are more likely to open a TFSA, compared to other Canadians.

    - A high interest savings account is the most popular financial product
for a tax free savings account; relatively riskier publicly-traded
securities are the least popular. Of those who definitely, probably and
might or might not open a tax free savings account when it becomes
available in 2009, half are likely to use high interest savings account
for their tax free savings account. A regular savings account also proves
to be popular among Canadians likely to open this account. Forty-eight
per cent of Canadians are likely to use a high interest savings account
for their tax free savings account. At 55 per cent, B.C. residents are
more likely than other Canadians to use a high interest savings account
for their TFSA.

    - 51 per cent of Canadians are planning to put more money into a tax free
savings account because of current economic conditions.

    Interest paid on savings account

    - Most Canadians are not content with the interest rate offered by their
main savings account. Fifty-four per cent of those with a savings account
are currently dissatisfied with the interest rate earned by their primary
account. Forty-one per cent are satisfied. Five per cent are unsure how
they feel toward the interest rate offered.

Contacts:
Coast Capital Savings
Divine Agodzo
Manager, Media Relations
(604) 517-7549
Email: divine.agodzo@coastcapitalsavings.com

Coast Capital Savings
Erin McKinley
Media Relations Advisor
(604) 517-7657
Email: erin.mckinley@coastcapitalsavings.com
Website: www.coastcapitalsavings.com

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