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Bank of America's Keep the Change (background) program has a big, big catch to it.
The savings account where your money is likely going has a pitiful .2% APY.
Yup, for real. From the fine print:
Savings accounts eligible to receive matching funds include, but are not limited to, Regular Savings, which requires a minimum opening balance of $25 and pays a variable Annual Percentage Yield that was 0.20% as of 08/28/08.
0.2% APY means your money is not working for you. When you could open an online savings account that offers upwards of 3.75% APY (Dollar Savings Direct, WaMu), there's no reason you should be using BofA.
Still not convinced? Look at the other requirements:
- $300 minimum balance, or
- Automatic monthly transfer of $25
- $3 withdrawal fees if balance is under $2,500 and more than 3 monthly
Considering that the best online savings accounts have no minimums, no fees, and no requirements, you should not be keeping your money with Bank of America.
It's great that BofA is helping people automate their savings — it's the easiest way to start pocketing more of your own money — but customers still aren't getting a good deal.
(Yes, you do get matching funds from BofA of up to $250 in one year, but you could get the same by smartly opening certain savings accounts. And you could move the money into a money market account, but the requirements for that are even worse.)
Saving your money smartly means making it work hard for you. If you want your money to make you money, open an online savings account now.
I use a version of BofA's Keep the Change at my own bank. I have WAMU Online Savings account as well as a Free Checking account with them. I use my debit card more than cash. What I do tho is just as simple:
I keep very good records in my checkbook of my spending. At the end of every 2 weeks, usually the day I get paid, I tally up how much I would have sent to BofA's Keep the Change system and transfer that to savings.
e.g. If I make 3 purchases within the 2 weeks.
1. $8.35
2. $6.84
3. $5.61
Then I would round them up like normal and transfer the difference at the end of 2 weeks. meaning that this pay period I would transfer $1.20. I use my debit card more than this but normally I would prolly transfer $10-15 every 2 weeks. This way it doesnt work for just debit card purchases where I swipe but it works for online, normal bills, credit card payments. Different things that dont require you to swipe it. Just my way of doing things.
[...] Online Savings Blog - The Secret Catch to Bank of America's "Keep the Change" Program [...]
You're correct about the Bank of America savings account. The first time I saw that three dollar charge was also the last. I have to say though, they didn't give me any hassle about closing my savings account and their checking is phenomenal.
Personally, I love their automatic bill payment. I don't even write rent checks anymore. They just mail them so that they arrive on or the business day before it's due. Their customer service is great. With the exception of their savings account, BofA is wonderful.
BofA keep the change is a fraud for those with a saving account less than $300.00! They tell people that they can enroll into the program for just $25.00 to open a savings account. Thereafter, they take $3.00 dollars fee if the balance is less than $300.00. At the time of signing for the program, i was told that there were no fees on the program. I have my savings at my credit union and there is no such fees for the balance. I think BofA is doing fraud to people that sign for the $25.00 opening the account. They know that if people didn't have a savings account with them, most likely will take them a year or so to get the $300.00 balance with the program. By then, they have already taken about $36.00 fees. Multiply this by thousands and you get a significant amount. I wonder how many people had into the this situation and all those fees charged should be return plus interest.
[...] of course, there's a catch. Here's the fine [...]