What do you think of Bank of America’s “Keep The Change” program? How it works is every purchase you make with your BoA debit card you make gets rounded up to the next dollar. The difference between that and the actual price gets moved from your checking to your savings account. The idea is to help people save. Good idea, but there’s some potential downsides I can see:
1) It can unconsciously rationalize spending. Some part of your brain is going, “It’s ok, I’m saving.”
2) Personally, I only use my debit card to withdraw money from the ATM. I don’t want my account number getting stolen off some insecure store PIN pad, and paying only in cash encourages wiser spending.
3) If you’re going to do this program, at least once a month move the money from the savings to an online savings account. Interest rates at brick and mortar banks are like .0crap, online you can get upwards of 3% right now.
One neat thing is that for the first 3 months, they will match everything you save 100%. After that, 5% of your purchases up to $250.
The deal has been around for a while, we wrote about it in 2005, but a new smarmy ad campaign (the one that goes, “This is America. Do we let the sun just shine or the wind just blow? No, we put them to work.”) and recent events, made me think we could revisit it. What do you think? Is this a handy program, or the Diet Coke of savings plans? Leave your thoughts in the comments.
Keep The Change [Bank of America] (Photo: atbartlett)
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This is bad for one key reason … one would have to have a BofA account to begin with. Enough of us here have seen the horror stories to know why I say that.
Wait…..let me get this straight. For the first 3 months they match whatever I put in right?
So if I were to buy a pack of gum for $.25, They would move .75 to my savings account and then add .75 to it?
So I could theoretically get $1.50 and a pack of gum for a dollar? Is there a limit on this or is this the best scam ever. I mean I could really go for a return on investment that high.
@hollywood2590: yes assuming you remain in the program for a year. you only get your matches for the year on your anniversary of joining.
don’t’ have BOA never will.. but i do have Wachovia and they have a similar program where every time you pay a bill online or use your debit card, you automatically have 1 dollar taken out of your account and put into a savings account. if you keep that money in there they will match it at years end up to 300 dollars. So right now i have about 400 bucks in there I’m gonna keep it until they match it make 300 bucks and then use that money to buy stock.
If you live paycheck to paycheck then this wouldn’t work for you, but if you’re fine in your finances than this system actually puts aside a nice nest egg, I may even use this money for Christmas shopping instead.
In the first 3 months when they were matching 100% of my change, I’d purposely make totals roll to .01 (at the gas station, restuarant/bar tips, etc. never by making individual transactions, I can’t imagine what I would do if I were waiting in line behind someone at a store who was doing that!) but now that those 3 months are over and I recieved my matched amount deposit from BOA, I try to avoid the .99 deposit as much as possible…I’d rather put that exta .99 worth of gas in my car than into my savings….
I can’t believe BoA is trying to patent this. Wachovia is trying to patent their program too.
Just want everyone to know that dumping change into a tip jar is patent pending. I’ve be filing papers to have this patented. If you are doing this, I’ll be suing you!
Well for the first 3 months…everyday I would stop on the way home and buy 1.01 in gas (this is the period in which they match your change 100%). I was usually stopping anyways for a caffine fix and with the price of gas, this took a few nano seconds to achieve.
I think I made $180. Once the 3 months was up, I never used it again. I am not a fan of check cards because if you have it stolen, you are in a far worse world of hurt than a simple credit card. Plus, with the cost of flying now, my airline mile card has become valuable again.
Its a good idea, but my idea is better. Use cash. Get change back. Put said change in jar. Leave jar in room. Rinse and repeat as necessary.
That said, I also have a jar in my living room that acts as a collection plate for when people come to my house. Its completely sealed off and locked down to coffee table. Loose change for all!!
I put money into savings monthly anyways, but i do use this and i like it. I am careful about never having a low balance in my checking, so i never worry about overdrafts, and over the last two years it has helped my stash an extra 200 each year. in the big picture, that 400 is a nice chunck of change. As far as low interest goes, i keep a balance in my savings at BoA, and when i reach 1000 over that balance, i transfer it to my ING account. best of both worlds really.
Those commercials are a terribly awkward attempt to apply the current energy issues to banking. They make me cringe.
Yeah the commercials drive me crazy. “YES! YES Kiefer, we DO let the sun just shine and the wind just blow, that’s the damn problem!”
I do use Wachovia’s version of the same thing, they promise 15% on top of what I put in at the end of the first year. Seemed a pretty good idea.
We have been using this for quite a while and it has been very beneficial. Saw our savings grow several hundred dollars in a matter of months. (And we NEVER use the card to buy things as a debit card, credit only (took a while to get that into the wife’s head))
“This is America. Do we let the sun just shine or the wind just blow? No, we put them to work as long as it doesn’t ruin Ted Kennedy’s view.”
As long as it’s not your primary form of savings, I think it’s great. I see it as sort of similar to the snowball debt repayment notion. You’re just throwing a little extra on the pile, and you don’t even have to think about it. After all, this is America, and we don’t want to have to make too much of an effort.
Just set up an automatic transfer from checking to savings yourself. On the plus side, if you don’t have it in your checking account, you can’t spend it.
>>What do you think? Is this a handy program, or the Diet Coke of savings plans? Leave your thoughts in the comments.
Can someone please explain the “Diet Coke” reference to me? It’s eluding me….
Thanks
it was good when BoA matched whatever you contributed (getting gas in $XX.01 meant a free dollar every time I filled up…)
I have BofA w/ Keep the change. I like it, I balance my checkbook that way anyway, So that I would always have a reserve in my checking account. Instead the reserve is being moved to my money market account. My overdrafts however are pulled out of a linked credit card (Card has 1000 credit line, ONLY used for overdrafts, physical card in safety deposit box). As the credit card charges interest by the day (normally never overdrafted longer than 3 days w/ weekend) Where as a link from savings costs $10 per transfer. Regular NSF is $25 for the first one, $35 for each additional fee. Know your fee’s and understand them and you will be fine!
This program has worked really really well for me. I was not saving AT ALL just over a year ago. This got me started. It just got me in the habit of saving. Now, I’m putting about $200 per month into saving (from Keep the Change and other deposits). I know it isn’t much, but it is better than before. I’m sure there are better ways to go about it and ways to make more interest, but it worked great for me. I have yet to find anything evil about it.
I wouldn’t trust BofA to do the proper calculations on their end. This whole idea is fraught with potential screwups.
I have used this for the last year on and off. It doesn’t do much really, it’s kind of annoying. The only upside was at the end of last month, after a year, they matched my savings, so they basically gave me 175$.
Also, this cannot overdraw your account. If it’s not in there, they don’t move it.
My husband and I love it. We are debit card junkies and I love having all of my BoA accounts tied together where I can see everything with one log in.
After a quick census, I can report that keep the change transferred $42 from various purchases to our savings last month alone, not counting my regular auto-drafted saving contributions. We’ve been enrolled since 2006, and I’d venture to guess that the change has added up rather significantly over that period of time.
On here, I’ve read some pretty crazy BoA stories before, but this is one program that isn’t evil or trying to be sneaky.
I bank with Wachovia. They have a comparable program called Way2Save. Any transaction you make with your debit card and every time you pay a bill online, $1 is put into your Way2Save account.
Honestly, with any of these “savings” programs, you could do things yourself. As an existing customer, it’s a nice feature, but it would never convince me to open an account elsewhere.
Personally I think this is just another way for BoA to increase the probability of you incurring an NSF or overdraft on your account. This would happen to people who are not constantly checking their online balance on a nearly daily basis, which is honestly most people (the demographic here is skewed to the opposite way via a self-selection bias).
If we take your typical BoA customer who can barely manipulate a calculator, then at any given point in time you really have no idea how much money you might have. Each transaction you do, can take as much as 99 cents out. Thus over 20 transactions you can mis-calculate your balance by up to $20. This might not seem much, but compound this over say a married couple with a joint account. Suddenly you could be short $100 quickly if you’re not paying attention. If you write a check assuming that $100 is in there, then the NSF and fees start kicking in like gang busters.
Again I doubt many here would fall into this trap, but I do think that this kind of thing would happen very often to others not as savvy.
I think it is worth it because it allows you to save without thinking about it, and the free money from matching, though it may not be much, is still free money. I’ve been enrolled in it for a couple years now. After the first year, I got $42 from the match, the second I got $6. I have another higher interest rate saving account, so I don’t pay much attention to my savings at BofA, but when Keep the Change puts the account over a certain amount, I apply that to my credit card or my student loan. So I’m actually using the program as a way to trick myself into making extra debt payments. It’s like having a physical change jar for people who don’t use cash very much.
As for all the commenters saying it’s a scam to make people overdraw their accounts, I think that’s pretty unlikely. First of all, if you have so little money that the missing change is going to make you overdraw, you probably don’t/can’t save any money and you wouldn’t enroll in this program. Second, if you’re the kind of person who doesn’t pay attention to their account balance, I’m betting you also aren’t the type to go into your online banking and sign up for this.
I use it. It takes the money out after every qualifying transaction, usually at the end of the day. It does not work with automatic debits or online purchases, but it does work when you use your debit card as a credit card when you physically use it. But I only buy gas and a few other things a month with it, so in two years I’ve only gotten around $100. I have automatic transfer every month to ING and Sharebuilder, so my BoA savings account is just there because it’s free. Unfortunately, my checking account has a higher interest rate.
@lifestar Yes, I got hit with the $3 fee one time (the first time my savings dropped below $300) and I was pretty pissed about it. But it’s easily fixed by setting up the automatic transfer. If you need that $25 in the checking, just transfer it back once it hits savings and you’re good to go. You could even automate that, I’m sure.
The first time I saw this I thought of a friend at a regional bank. His job is to think up fees for the bank. I wonder if this drives revenue to BoA through ATM card usage fees charged to the retailer. Do retailers get charged a percentage when the customer uses an ATM card like they do with credit cards?
Been using it forever. No problems. Keep $300 in my BoA savings account. Whenever the Keep the Change money hits $25, I transfer that amount over to ING. I am one of those people who dislikes carrying a lot of cash, so I use the debit/credit card almost exclusively.
It’s a great way to make some money off of something you already do, which is like credit-card rewards. But if you’re relying on stuff like this exclusively as your “savings” then you’re in trouble. I recently ran a comparison of Keep the Change vs. Credit Card Rewards and I was surprised at hoe decent KTC is. The rewards beat it out every time though if you can be responsible enough to pay it off in full every time.
I’ve got a similar program with Wachovia – it just transfers a dollar at the end of the day for each transaction that clears that day. This can be a bit rough on Mondays when the transactions I made after 5 on Friday all hit at once, but it hasn’t caused me any overdraft fees – saved me from a few in fact when I had the money in the savings account to transfer back into the checking. I have a shockingly high interest rate on the account as well.
I have used the program for a couple of years now. BOA matches a percentage of the savings, and it has not “rationalized” spending. In fact the only impact it has on my spending habits is that when I purchase gas I no longer round to the dollar. I think its a great program.
Okay I have read most of these comments and it seems that some people have their facts straight and some don’t. I use to work for Bank of America at customer service so I have handled many people who call in about their accounts. Now with regards to KTC it is a great program if you learn how to maximize it.
No the program will not overdraft your account like has been said earlier the transfer is canceled. Also it is my professional experience that the people who complain about the program are the same irresponsible people who overdraw there account every other week because they keep track of their accounts. This isn’t the banks fault they can’t tell you how to spend your money, it is your responsibility to make sure the money is there from start to finish (I know the national mentality on responsibility is to not assume it when you should). So if your overdrawing your account then it is your fault don’t blame the bank because they asses fees that you agreed to when you opened the account; ignorance of the rules is not an excuse this is the information and that info is available if you want to make the small effort to get it.
Normally with the KTC the first 3 months the bank will match 100% of you KTC and after that it is 5%. What allot of people don’t realize is that certain affinity groups will increase that. My debit card is affinityed for the national small business association and my KTC match is 15% not 5%. so you can get allot more bang for your buck if you do a little research.
I started this program from the first day it was offered. It is perfect for me and my family. We live paycheck to paycheck and usually never have anything left to put in savings. We don’t use check and have no credit cards or credit card debt. Our only debt we have is out house and it has never been refinanced or messed with and we owe under 50,000 on it. I love how BoA takes just a little bit from each purchase and puts it into our savings. The bonuses are nice too. I have never had any issues with insufficient funds. This is a great program and I would recommend it to all my friends.
This is scam…its my own FUCKING MONEY! how can I be saving “more” when its already mine! you arent giving me anything more…aarrgh
When i was with Bofa they pitched this, so naturally it took them several minutes to accurately answer if this program can trigger the NSF fees, and yes it does.
“Keep the Change” is another way of scamming you into overspending and getting raped in NSF fees.
Do not listen to posters telling you otherwise.
Something to be aware of…. if you transfer money from your savings account back into your checking account, more then 3 times in a month, they start dinging you with service charges upwards of $4 plus