As they wrestle over new customers and market share, Hawai'i's banks have turned to a decades-old marketing strategy: freebies.

But the toasters, coffee mugs and Pyrex gifts of yesteryear have given way to high-tech perks such as iPods and BlackBerrys.

One lender, Bank of Hawaii, is offering a $10,000 home makeover as a sweepstakes prize to entice people to sign up for a new home equity loan. The makeover comes after the bank gave away a Lexus ES300 as a sweepstakes prize last year.

With the low-interest- rate environment and consolidation in Hawai'i's banking industry, Hawai'i's financial institutions have turned to giveaways, or premiums, as a way to make their products stand out.

The banks — which previously promoted their service records, convenience and competitive fees and interest rates — now they find themselves in a heated contest over who can give out the bigger prizes as they battle over the $23 billion Hawai'i banking market.

"There's a lot of competition in the marketplace for deposits, and I think banks recognize that premiums can be used to differentiate themselves," said Brandt Farias, marketing director and executive vice president at First Hawaiian Bank, whose company this year gave away $249 BlackBerry computer devices to anyone who receives a Mastercard business card with the bank.

Central Pacific Bank is making a big splash for itself with its iPod Shuffle giveaway, thanks to a big-budget television advertising campaign.

The bank is providing the $99 musical devices to anyone who maintains a $10,000 minimum balance on a Central Pacific "exceptional account." That minimum balance covers the customers combined balances for checking, savings, CDs, IRA accounts and personal loans with the bank.

Wayne Kirihara, Central Pacific's senior vice president and director of marketing and public relations, said the iPod program has exceeded expectations, although he declined to say how many devices the company has given out.

Susan Ing, senior vice president and director of marketing at Bank of Hawaii, said the bank uses premiums to create a buzz around a specific product.

For instance, anyone who applied for a home-equity loan from March to June was eligible to take part in the bank's home makeover sweepstakes. The winner — who has not yet been announced — also receives a free consultation with celebrity designer and "Trading Spaces" star Vern Yip.

Ing said that the contest resulted in double the number of applications for home-equity loans during the period.

"In general, banking products are viewed as a commodity, and having premiums and sweepstakes creates interest and sometimes they work like a tie-breaker," she said.

Ing said the bank conducted a similar program that gave away bobblehead dolls as part of its "That's my bank" advertising campaign last year. She said the bank quickly ran out of the bobbleheads, which remain in high demand. From time to time, the bobbleheads turn up on eBay for sale, she said.

"People are still calling us to see if they can get bobbleheads," Ing said.

Not all are convinced that perks make a difference for their customers.

Denise Takashima, senior vice president of marketing at Territorial Savings & Loan Association, said most of Territorial's customers are older than 55 and are on fixed incomes. They are attracted by the interest rates the company pays, which are the highest in the state.

"Our philosophy is to give higher interest rates to the customer," Takashima said.

That point is echoed by consumers like Sheldon Nakamura of Kane'ohe. Nakamura, who banks with Central Pacific, said he's more likely to purchase an iPod with his own money than invest $10,000 in an account that's generating 2 percent or less.

And while it would be nice to receive an iPod or a PlayStation, Owen Nobuji of Kuli'ou'ou said, he's more attracted by yields he gets from his bank.

"The little doohickeys won't make a difference unless you have a good interest rate," said Nobuji, a longtime Central Pacific customer.