Bank of Amercia-Keep the Change Review
Bank of America online banking has been promoting its Keep the Change savings program a lot lately. Even though the Bank of America Keep the Change program is not new, we thought that we should provide a review of this unique way to save money. The Bank of America savings account is not one of the best savings accounts in the United States due to its low interest rate, but when you combine it with the keep the change savings program, it can actually provide a nice return on your investment. We hope that you enjoy this Bank of America Keep the change review.
This BofA savings account program allows you to save a little money every time you make a purchase with your Bank of America credit card. If you are purchasing a coffee at Starbucks that costs $2.04, Bank of America online banking will charge your Bank of America credit card $3.00, giving $2.04 to Starbucks for the coffee and transferring $0.96 to your Bank of America savings account.
But Keep the Change is more than just a way for you to be forced to save your own money. Bank of America online banking matches your contribution 100% during your first three months of the year and then matching at 5% for the rest of the year up to a maximum of $250 per year. While we would like to see the 5% matching not be capped at $250 per year, this is a great way to save an extra $250. This Bank of America matching program significantly increases the effective savings rate paid on you BofA savings account.
We hope that you enjoyed this review of the Bank of America Keep the Change savings account program. If you are a participant in this BofA savings account program, please tell us about your experience in the comments below.
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Bank of America’s Keep the Change program: Keep your savings elsewhere
Posted Apr 23rd 2007 6:20PM by Zac Bissonnette
Filed under: Bad news, Consumer experience, Competitive strategy, Marketing and advertising, Scandals, Bank of America (BAC)
When my friend warned me about Bank of America’s (NYSE: BAC) Keep the Change program, I couldn’t believe what he was saying. “They say that they round your purchases up and put the money in your savings account, but actually they just transfer it from your checking account.” I assumed there must be something he didn’t understand but, upon further investigation, he was right. Bank of America’s Keep the Change program is probably the most cynical, exploitative promotion from the financial services industry I’ve ever seen.
Read the details on Bank of America’s website. On the surface, it might sound good. The bank does match your Keep the Change savings for the first three months, and then matches 5% of any additional savings, up to $250 per year. How can Bank of America afford to pay its customers to save with them? Here’s a table of the interest rates that a few different savings accounts pay (Source: BankRate.com):
EmigrantDirect.com – 5.05% APY
PFF Bank & Trust – 5.30%
ING Direct – 4.50%
TD BankNorth Massachusetts (Money Market) – 2.00%
Bank of America (Savings) – 0.20%
Bank of America (Money Market) – 0.30%
No wonder Bank of America can afford to match 5% of your spare change! It’s amazing the things banks can do when they don’t pay interest on their savings accounts (0.20% is not interest, my friend). It’s also not surprising how excited they are about savings accounts. It’s an interest free loan for them.
If Bank of America’s savings account didn’t pay an interest rate that is 1/17th as good as PFF Bank & Trust’s, I would say sure, sign up for the the Keep the Change program. But as it is, this is just a pathetic marketing ploy by a bank that cares so little for the well-being of its customers that it preys on their naivete by offering them interest-free savings accounts.