Bank Offers Handguns in Lieu of Interest
HARRISBURG, Ill. (AP) _ Mention a gun in most banks and tellers get edgy. But bankers in this southern Illinois town say they are scaring up millions of dollars in deposits by giving special-edition guns as deposit premiums.
For three years, First Bank & Trust of Harrisburg has been providing a three-piece set of revolvers in lieu of interest on special certificates of deposit. Recently it switched the premium to a two-gun set of semi-automatic weapons.
″It was daring for the bank to do this,″ said advertising executive David England of Carterville, who came up with the idea.
″But it has paid off,″ he said Friday. ″It’s brought hundreds of depositors from all over.″
The promotion is aimed at both collectors and investors, and the bank attracts business by advertising the special-edition Smith & Wesson guns in weapons-oriented publications, said Donald M. Medley, bank vice president.
″We decided that, if we could get Smith & Wesson to make these guns and work this promotion with our little bank, it would help us raise millions of dollars in new revenue outside our particular geographical area, which it’s done,″ he said.
Medley would not reveal how much the promotion has generated in deposits or divulge the bank’s assets, citing Securities and Exchange Commission rules.
But he said the bank in this town of 10,400 people, about 55 miles southwest of Evansville, Ind., had received deposits from across the country.
The bank keeps a licensed gun dealer on its staff for the transactions.
″We came up with a three-gun set in a presentation case: a .44 Magnum, a .22-caliber and a .357 Magnum,″ England said.
″Hundreds of sets went out, and we’ve just now gone to a two-gun set: a .45-caliber and a 9-millimeter automatic.″
Depositors can collect the guns by keeping their money in the bank from six months to 10 years, depending on the size of the deposit.
For example, a six-month CD would require a $35,850 deposit, but a 10-year CD only $2,000.
″The effective yield - the cost of the guns - is equivalent in value to interest,″ England said.