June 10, 2008 At Moneyaisle, banks bid for your business Play video

(Peter Howe, NECN: Burlington, Mass.) - Ray Stata is a legend of the Route 128 high-tech belt. Founder of analog devices. Big-time investor in startups.

He gave some of his fortune to his alma mater Massachusetts Institute of Technology for its most distinctive building, the Stata center, designed by Frank Gehry.

Ray Stata's latest venture is way more down to earth: helping you make a few hundred more bucks from your next bank account or certificate of deposit.

Stata is chairman of Moneyaisle.com, a new website where banks bid against each other for your business.

He gave us a demo, logging in to put ten thousand dollars in a six-month CD. Initially 69 banks are interested in his business ... Starting at 2.3%. An automated auction ensues

After 15 rounds of bids, all but one bank drops out ...they'd pay 3.6% interest.

In less than a minute, you made a $130 more in interest than if you'd taken the two point three percent CD.

For little banks like StonehamBank of Stoneham, Massachusetts the attraction of Moneyaisle.com is that it can help them get customers for just 10 percent of the cost of conventional marketing or Google.

A good example: the winner in Stata's CD auction was New Dominion direct, a little four hundred million dollar bank in North Carolina.

But you don't have to worry about fly-by-night lenders.

All the banks that Moneyaisle works with are FDIC insured so there's no question about whether

Roush's tech-tracking website calls Moneyaisle a big step forward from sites like Lendingtree.com or Bankrate.com that only quote you rates.

The banks and the financial services companies are not actually literally bidding against each other. The competition is what's new about Moneyaisle.com.

Down the road, Stata says, money aisle is looking at expanding into competition for credit cards, car loans, and other lending products.

NECN’s business report Peter Howe reports.