A few years ago, I signed up for Bank of America's "Keep the Change" program. With Keep the Change, every charge to your debit card is rounded up to the nearest dollar, and the difference is automatically deposited in your savings account. The idea is that you save a small amount with each purchase without even thinking about it, which gradually adds up over time.
So far, so good. However, somewhere along the line, Bank of America started charging a $5 monthly maintenance fee on the account. I was never formally notified of this additional fee, and so I didn't even realize it until I noticed one month that my savings account balance had gone DOWN instead of up. It turns out that I wasn't even accruing $5 worth of change per month, so I was losing more money due to the maintenance fee than I was saving via Keep the Change!
I called Bank of America and they explained that I could avoid the maintenance fee either by making a minimum deposit of $25 into the account each month, or by maintaining a minimum balance of $300 (I had $250). Of course, these terms aren't detailed anywhere on their website (at least not that I could find); Keep the Change is described as a "free service," and the only stipulation is that your savings account has an initial $25 balance.
In summary, if you prop up your savings account by depositing more money into it than you'll ever realistically save with Keep the Change, you'll avoid the fees - but then you might as well not even bother with the program in the first place. And if you don't, you'll never even reach the $300 balance on a new account as the maintenance fee could well end up costing you more than what you're saving!
The easy solution: find out what you need to do to avoid maintenance fees on your savings account, and if you agree to the requirements, follow them every month.
In this case, scheduling a $25 transfer from checking to savings every month would suffice, but James never intended to use the service in that manner. Not every bank product is designed to eat up your money, but if you're not careful you can get hit with unnecessary fees, so always take the time to look for ways the bank can charge you and then make sure you're willing to do the opposite—or walk away from the offer.
Update: I failed to address James' real issue, which is that he says BofA never told him about the fee. If your bank institutes a new monthly fee and doesn't tell you about it, contact them and request a refund. If they refuse, tell them you plan on reporting them to the appropriate agencies, and then follow up on that threat. (You might also want to move your business elsewhere just on principal.) Banks do make mistakes whether they like to admit it or not, especially when they're "too big to fail" and running themselves ragged trying to find new ways to generate revenue.
(Photo: Nieve44/La Luz)
]]>(You might also want to move your business elsewhere just on principle.)]]>
I totally agree!
Great picture, keep 'em coming!
]]>@HesNoKennedy: While I do feel bad for the customer, I couldn't help but think the same thing -- only $5 a month? I usually average $35 a month on KTC but I also use my debit card for nearly everything.
]]>In the end, I canceled the savings problem and use the boa checking for small stuff like buying lunch. All of my money transactions are now with a credit union.
]]>Several months ago I needed to temporarily transfer funds out to checking for about 10 days and the balance dropped to around $100. I then transferred funds back in and also had the monthly $25 automatic transfer from checking.
I was still hit with the fee. I almost didn't notice it, and once I complained it was fixed on the _second_ complaint.
After my first complaint I got the standard copy and paste of the fee policy, to which I had to respond a second time to point out that it's either maintain $300 __or__ have an automatic $25 transfer.
]]>Discovered this more than a year ago - they manage to "steal" your money by offering the program without a maintenance fee for the first few months. Like the LW I realized the account was GOING DOWN even though I wasn't using it because the fees were higher than what I was putting into it.
Fracking thieving bastards. You should have heard the excuses when I complained about the lack of transparency.
I also just discovered my mortgage is adjustable - when I specifically insisted on a fixed rate. Now I have to pay to refi. I cannot express how much hatred I am currently harboring for all financial institutions, my realtor and mortgage broker.
And yes, I am aware I should have gotten a magnifying glass and made them all sit there for hours while I read all the contracts - even then I'm not sure they wouldn't have obfuscated the relevant details in such a way that it might have slipped by anyway.
]]>I'm just surprised he's only racking up $5 in Keep the Change transfers a month. Maybe I'm the only person who uses my debit card like a maniac but I've racked up $75 through Keep the Change in less than three months (mostly off of <$10 charges).
]]>I sent up the same account and happen to really like the Keep The Change program. It doesn't add up to much but its only supposed to be support. It's 'change' and its meant to augment an existing savings program. It's not unreasonable for a bank account to have a $300 minimum or require $25 a month in transfers in to avoid a fee. There are fees and costs to BofA inherent with you having a savings account. These fees are very clearly marked on the website. If you click on any financial product offered on the main page, a link to the fee schedule is listed prominently on the right. Two clicks.
There are many other ways to find this information too. A quick glance by the OP at what he was signing up for would have saved both parties some time and suffering. BofA makes some mistakes for sure (shame on you for stranding another OP in India), but people in general need to slow down and pay attention to what they are doing. We should really strive to be more informed consumers, not reactionary.
Not blaming the OP but... rabble rabble rabble.
]]>You gotta just love this site for stuff like the picture of the anorexic piggy bank.
+1 Zing.
]]>@AK47: Keep the Change, where B of A Keeps YOUR change!
]]>The fee is for the savings account, not for Keep The Change. I set up my savings account with BoA nearly three years ago and even then, it was stated on their website that a monthly maintenance fee would be assessed unless I maintained a minimum balance or set up an automatic, electronic $25 monthly transfer from my checking account to the savings account.
]]>Yep, been there. One reason among many that we dumped B of A.
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