Radius Bank: A Virtual Bank with Very Real Savings Opportunities

In a Nutshell: Everyone likes earning rewards. That’s obvious from the number of rewards credit cards available on the market today. But, while those cards continue to be popular — and lucrative  — to consumers, other financial products haven’t caught on to the rewards frenzy — until now. Online-based Radius Bank leverages its lack of overhead costs to offer its customers a high interest rate savings account, a choice of six rewards-heavy credit cards issued by Visa and American Express, and a unique rewards checking account that provides 1% cash back for signature- and credit-based debit transactions. //

We’re living in a day and age when your local bank can be 2,000 miles away from your doorstep. Even if you never step foot into a branch location, you can get the same personalized service customers once got at neighborhood bank locations 20 years ago.

Virtual banks — institutions without brick-and-mortar locations that operate only online — have exploded in popularity over the last decade as consumers come to understand that more physical bank locations often means lower interest rates and higher fees.

If your idea of a pleasant bank experience involves sliding your phone out of your pocket, tapping a few times on the screen to complete a transaction, and then putting it back into your pocket, chances are you’re already a fan of virtual banks.

Radius Bank opened in 1987 — well before the virtual banking boom — and found its place online as one of the web’s leading web-based financial institutions.

“It all boils down to the customer experience and what we’re able to provide,” said Chris Tremont, Executive Vice President of Virtual Banking at Radius Bank. “We offer convenient products that are useful in people’s everyday lives — from convenient checking and savings accounts to financing when people need it to help a small business grow.”

Radius’ entire operation focuses on technology. The Boston-based company offers frictionless web-based and mobile platforms that allow clients to manage their accounts, pay bills, and earn rewards all at once.

“We have a near 24/7 customer support center that is available via all sorts of digital and virtual channels,” Tremont said. “We try to be there to help whenever and wherever our customers need us.”

The absence of physical locations means Radius can leverage its low overhead costs to provide greater savings and rewards to customers. The savings opportunities are evident in the Radius Hybrid Checking account that offers up to a 1.20% APY interest rate. The rates for the Radius High Yield Savings accounts are among the best in the industry, topping out at 1.86% APY.

The bank charges no monthly service fees on any of its accounts and requires no minimum balance after the $100 to open an account. Radius customers have free and unlimited access to their accounts online and on the Radius Mobile app.

While Radius’ main focus is on its consumer and commercial checking and savings accounts, that doesn’t mean the institution has forgotten about credit cards. Radius has partnered with issuer Elan to develop a catalog of six consumer credit cards with offerings from both Visa and American Express.

Visa Cards

The Visa® Platinum Card gives cardholders who tend to revolve their balances everything they’d want in a low-interest card, including no annual fee and a 0% introductory APR for 15 months. After the intro period, APRs range between 13.74% and 22.74% based on creditworthiness.

The Visa Signature® Real Rewards Card gives cardholders 1.5x Unlimited Rewards points per dollar spent and 2,500 bonus points after the first purchase using the card. Users can redeem their points for cash back, merchandise, travel, and gift cards from popular retailers. The card sports a 0% introductory APR for six months, followed by a variable APR ranging between 15.74% and 24.74%.

The Visa Signature® College Real Rewards Card earns students the same rewards as its Visa Signature sibling. The Secured Visa® Card offers customers a chance to build or rebuild their credit for a $35 annual fee, a variable APY currently at 22.74%, and credit limits equal to the size of the initial card deposit, up to $5,000.

“We know there are people out there who have difficulty getting access to regular credit or even a basic bank checking account,” Tremont said. “This secured card is a way to help people re-establish themselves.”

American Express Cards

Radius’ American Express offerings would satisfy even the most ardent AMEX card user who is looking for the big rewards the issuer typically pays out.

The Cash Rewards American Express® Card earns 3% cash back on gas for the first $6,000 in annual fuel spend, 2% cash back on supermarket net purchases, and 1% on all other net purchases. The card also offers a $25 cash back reward after the first purchase, with no annual fee and a 0% introductory APR offer for six months. After that, the variable APR increases to a range between 15.74% and 24.74%.

The Premier Rewards American Express® Card offers points redeemable for cash back, travel, merchandise, and other perks. Cardholders earn four points per $1 spent on eligible net restaurant purchases, three points per $1 on eligible net airline purchases, two points per $1 on net gas station purchases, and one point per dollar on all of spend. The card awards a 10,000-point bonus, worth $100 in cash back, after the cardholder spends $1,000 in the first three months.

The card is free to use for the first year, followed by a $99 annual fee. The APR on purchases will range between 15.74% and 24.85%, based on creditworthiness.

“Several years back, when we partnered with Elan, we decided we wanted to have the right mix of card offerings since every customer is looking for different things,” Tremont said. “Credit cards are not a one-size-fits-all solution, and we want to provide different card options to match what different customers are looking for.”

As one of the first online-only banks, Radius has long-since been a trailblazer in financial technology. The institution continues to carry that torch today with a planned redesign of its web experience and a total refresh of its mobile app set for release later in 2018.

“Once you go this route, you have to continue to innovate,” Tremont said. “That’s what clients expect. They’re out there living their lives with other types of apps and products, whether it be Amazon or Facebook, and expect that same experience from their bank.”

That technology appeals to a wide range of consumers who are quickly adapting to the changing landscape, in which technology allows them to access their bank accounts when they want and from wherever they want.

“We want to provide a full suite of solutions to our customer base,” Tremont said. “We feel like we’re really good at offering core bank products, like a checking and a savings account, and a great technology experience that goes with it.”

As part of the technology offerings, Radius also offers customers free access to its Personal Financial Management tools that allow users to link accounts and get a big-picture view of their finances without juggling multiple logins and setting up complicated spreadsheets.

In February 2018, Radius introduced its Radius Rewards program to provide cash back opportunities for checking account customers. Customer response to the cash back rewards has been tremendous, and the bank hopes the program does for checking accounts what rewards did for the credit card industry.

“The program offers 1% unlimited cash back on signature- and credit-based spend,” Tremont said. “So, when you use your debit card and sign for the purchase, versus entering your PIN number, you can earn 1% back on your total purchase.”

Radius tallies earned rewards on a monthly basis and deposits the proceeds into clients’ checking accounts the following month. Tremont said that, while the program is popular with Radius customers, it may not be realistic for every bank to follow down the checking rewards path.

“This isn’t a product that a lot of banks will offer because the revenue generated from debit card transactions is generally smaller than what it is on the credit card side,” Tremont said. “But for us, being an efficient organization, we’re able to give more back to our customers.”