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US banks bid for customers on MoneyAisle auction site

US banks bid for customers on MoneyAisle auction site

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Launched in June 2008, MoneyAisle is a free, fully-automated reverse online auction site where banks competitively bid against each other for customers through secure live auctions.

MoneyAisle facilitated $1 million worth of CD deposits in its first week alone, and in the fourth quarter of 2008 generated over $100 million in CD and High-Yield Savings deposits for banks across the US.

The MoneyAisle site was developed by neoSaej - a start-up developer of online auction marketplaces. It currently has more than 100 participating banks bidding on certificates of deposit (CDs) and high-yield savings accounts.

To initiate an auction, buyers use the site to set the amount of money they wish to invest in a high-yield savings account or CD, as well as the duration of the CD term. The auction then begins immediately, with participating banks bidding for the customer's business in real time. Once a bank wins the auction by offering the best rate, the customer can choose whether to accept it or not.

Since launch, MoneyAisle has gone one to offer innovative new features like automated CD laddering across multiple durations in a single session. CD laddering is an excellent tool for long-term savings planning, investing within FDIC limits while reducing interest rate risk. The system runs simultaneous auctions for each of the chosen durations, and displays the round-by-round bids and constantly increasing rates and then optimally selects the best combination of rates to maximize the overall APY of the ladder.

Finextra verdict: At a time when banks are in desparate need of liquidity, and customers are looking for safe investments with decent returns, MoneyAisle provides a truly "win-win" matchmaking service.

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