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Didn't believe me that Bank of America's Keep the Change program isn't worth it? I'm not the only one saying it.
Consumer Reports, probably the best consumer-advocate publication available today, agrees. In their upcoming November issue, they basically make the same argument I made in late August.
In its latest report, the Consumer Reports Money Lab took a look at three of the more well-known spend and save programs: Bank of America's Keep the Change, Wachovia's Way2Save and American Express One. CR found all three were limited and perhaps more rewarding options exist.
"Saving money can be tough. These programs offer the hope that something good can come from spending more, but when we crunched the numbers, we found the overall savings to be limited," said Noreen Perrotta, Consumer Reports money editor.
According to Consumer Reports's number crunching, it would take 1,728 transactions (averaging $.50 each) to get the $250 total Keep the Change match the first year. In the second year, it will take 10,000.
Wachovia's Way2Save isn't much better. The program, which moves $1 from your checking to savings account with every transaction, limits additional deposits to $100/month. And while it offers a 5 percent interest rate the first year, it drops to 2 percent for the second.
If you're looking for a good place to stash your money, consider an online savings account from DollarSavingsDirect (3.75% APY), FNBO Direct (3.50% APY), WT Direct (3.26% APY) or HSBC Direct (3.25% APY).
I agree. I've been using Save The Change for a little while now. The problem is that I also have been reigning in my spending habits. These two things are counter-productive. I have to spend more to save more… but I have to spend less to save more. It just doesn't work.
I've been eyeballing ING Direct for some time. I know they don't have the highest interest rate, but they are secure and have stayed at the same interest rate for quite some time.
Thanks for sharing.
I think the big picture we are missing out on is all of these programs are getting people to save their money. Lets face the fact we are americans and we dont save our money well. Keep the change may take so many transactions to max out the $250 payout but irregardless as a consumer you are still saving money while you spend and your being paid to use your debit card each and every year you have keep the change. It may not be $250 but its more money you will have then if you didnt have it and best parts its free.