I like the idea... I do the exact same thing, except with cash and real change and a jar. Ok so not exactly the same thing, but I did just buy an ipod with money that i didn't miss at all while it sat in a change jar.

From a personal point of view, why would I want this service? I can decide just how much I can put in my saving account every month, thanks.

From BoA's point of view, this is evil genius. Under the ruse of "helping America save" it gets to increase the odds someone goes under their checking balance, thus initiating those fun $35 charges, while increasing its reserves, to boot. The odds per person are small, but for a behemoth like BoA it probably translates to millions.

@iMe2: I actually use this, and it does create a nice little emergency fund that I have immediate access to. But if you overdraw your account by a charge or auto debit, the change transfer cancels out. It is never the actual reason that you are overdrawn.

My friend had a real problem with this. The problem is that when it goes to take the "change" out of your account, which it does once a month, there was not enough in the account to cover it and the put insufficient fees on the account. Pretty sneaky!!

@chasnleo: well, mine does that at the end of every day...

and u can only get the extra 'keep the change' match at the anniversary of ur account...

lets see, hypothetically u can get up to 99cents * 5% = 5 cents back on a purchase.... if i use my credit card, its like 1% back (using $2500 = 2500 points = $25 Gift Card)......so 1% of $5 is 5 cents.... use ur credit card after the 3 month period

I love ya Ben because my wife and I were just talking about this exact thing. While I agree that the interest rate is crap and the company itself is "teh devilzzz" at this point I think anything that makes america save is a good thing. I mean it would not take much effort to every 3 months take whatever is in that account transfer to something online and zero out the savings. Kind of the best of both worlds.

Especially if you do what makes sense which is when you use the debit card you round up to the next whole dollar and forget all about it. It makes balancing the account when you download from the web a pain in the ass but it again helps people save

@chasnleo:

I find that odd considering it takes the money out at the same time the transaction clears. Are you maybe talking about an automatic savings withdrawal ?

@chasnleo:

It takes the 'change' out in a lump sum? Ugh! I'd seen the ads and thought it quite a nice idea (albeit an idea which involves earning nought-point-nought percent interest, but hey...), but taking it all out in one go (no doubt right before payday or at some other point when your balance is as low as it's ever going to get) is just a recipe for NSF-fee disaster. I try to avoid keeping 'surplus' funds in my checking account because a) I'll only spend them and b) they're earning me sweet F.A. in there anyway, so I put them in my money market account where they rightly belong. I don't much fancy the idea of constantly trying to figure out what my 'change' might come to, and whether there's going to be enough left in the savings to cover it when BofA decides it's 'time'. Too much like hard work.

So... no thanks, BofA.

(Plus... this is just a wild guess, but I bet they only give you 'change' on debit transactions, rather than debit-card-as-credit card ones... right? Or not right? Seems like every debit-card-with-PIN transaction I make costs me money, so I always choose the 'credit' option anyway).

I dunno about all B&M banks, but my local bank is currently paying 5.01% APR on checking.

@chasnleo: Yes, these are the sorts of problems I'd envision with a system like this. There's no reason BoA would come up with it unless there's something in it for them, like juicy $35 dollar overdraft fees.

Besides, I just transfer over as much as possibly can to my savings account immediately, leaving only enough to get by on my debit card. That way, if someone does steal my card, the most it will have is a few hundred bucks. Plus, if I spend it, I know I won't have enough money to pay for food! Nothing to motivate saving money like hunger pains.

How about for the love of insert-your-deity-here people not use debit cards, like has been discussed here a million or so times? (No protection, annoying holds on your money, etc, etc, ad nauseum...)

@MsAnthropy:

oops, not '... enough left in the savings', obviously - I meant '... enough left in the account'. Duh.

It works well for me, and I never turn down free money. For people who want ultra control over their savings account, they don't sign up for it. For people who are horrid at savings, it gives them an extra hundred dollars every now and again that they would have otherwise squandered.

My only beef is that is it stupidly easy to sign up for but really difficult to terminate (i.e. you can sign up online but can't terminate without calling).

It seems like using a credit card with cashback that is set up to deposit into a savings account is the better solution.

@chasnleo: You are misinformed. The change comes out at the end of each day and the system will NOT take the change out if you don't have the funds to cover it or if your balance is below $25 I believe.

@deadandy:

Oh. In that case, it's not too bad an idea. Not a bad idea at all, in fact. I can't really imagine the thought of all those cents racking up in the zero-interest savings is going to make anyone in their right mind get all giddy and go on a wild spending spree, although (as with the AmEx Blue Cash that is my preferred way to make a bit of money in the process of spending it) I suppose it might take the sting out of spending, to know that you're getting a tiny amount back (from yourself) every time you buy something. It is quite a nice way to save at least a little bit of money pretty effortlessly, if you're the sort of person who would never voluntarily put any of your hard-earned cash into a savings account.

I'm going to buy 1,000 1 cent candies! Then I will save 99 cents for each one, and BOA will have to match my contributions.

An way to make 1000 dollars?

Meh, it's BofA.

"Do we let the sun just shine or the wind just blow?"

BofA doesn't blow, it sucks.

Is this good?

I tink Not.

Before we start a mini-flamewar here, it's possible that this program works differently for different BoA customers. You see, BoA is a giant monster formed by acquiring dozens of banks.

(This is where I start to speculate)

When these banks become acquired, it's too complicated and costly to integrate their IT systems with the rest of BoA, so they remain seperate. (I believe this is also why you must select your state when logging in to their site, and back in the day, certain states only supported Quicken access, or none at all!)

When Keep The Change was introduced, it probably had to be programmed into ALL of these systems, and most likely wound up being implemented differently across them.

Call my cynical, but this seems like an excellent way for BoA to systematically lower your checking balance faster than normal (and thus generating NSF fees!) while passing it off as a "feature" to customers.

If you listen to the ads carefully, they also mention that it's "patent pending." So, no other banks that I know of have implemented it quite the same, but some have something similar, like Wachovia's Way2Save.

I agree with Karl,

If at the end of the year the program is favorable they will try to find a way to hit you with some kind of fee's to make the net result positive on their end e.g. :

here's my store on BOA's NSF illegal practices : [lcstyle.net]

I'm all for getting people to save more, but BoA is evil and I am positive they will find a way to do evil with KTC. Others have already pointed out the most obvious bit of deviousness: it lowers your account balance faster, thus exposing you to more fees.

If they really were serious about getting people to save, they'd find a better way to incentivize saving that doesn't simultaneously have the potential to screw the customer. Perhaps they could offer better rates for people to direct deposit a portion of their check into savings, or a $10 bonus, or something else along those lines.

For myself and my husband, KTC offers no appeal whatsoever. We're getting an awesome bang for our buck out of an Amex Blue Cash. I'd rather see people do KTC on their own, the old fashioned way--round purchases up and round deposits down in their check ledger. Then wah-lah, at the end of the month there's a small surplus you can transfer over to your crazy-go-nuts good interest rate internet savings account.

(".0crap" made me laugh out loud, btw. Good work.)

[lcstyle.net]

@deadandy: This is good for people who are horrid at saving? By definition these same people are horrid as controlling spending - the most likely group to be spending beyond their limits, and incurring NSF fees. All this will give them is a pot to draw from when the NSF fess hit.

re: 2): I agree that debit card security is a problem, and I have no real desire to use one everywhere either. But I disagree that paying only in cash encourages wiser spending. I think that that depends on your specific psychology about money, which may in turn depend on your experiences when first managing your own money. I know that I tend to spend more recklessly when I carry cash, because it seems like it's not normal spending to me and I also don't usually account for it in my record keeping like I do with credit cards. When I use cards I have a built-in record of exactly where all my money is going that I can use to refine my budget goals and check whether I'm meeting them.

BofA trys to sell it like they are doing you a favor. Somewhat implying that they are giving you some money when in actuality they are automatically stealing some of your money from checking and putting it in savings.

I think the jury is still out on it. One telling factor is that every other bank hasn't co-opted it as a feature for their consumer bank offerings. If it was wildly successful every other bank would be hot on BOA's trail. Consumers may be wary of these types of gimmicks. Lose track of your "savings" once and the OD fee wipe out much of you you would have put away using the program.

I think this is an interesting idea and the matching for the first 3 months is a bit of an incentive (as is the 5% of every $250 afterwards). Since most people have trouble saving anything, this may be a way of starting them on the right track. If they automatically get a few bucks in savings for a year, they might be more inclined to build upon that amount of their own accord later.

From a psychological viewpoint, I think that this may have merit. People who have less than $100 in savings probably feel they will never be able to save a meaningful amount of money, so why bother? People who have more get a greater sense of the value of saving and the interest it can generate (though right now, that's not much of an incentive, it will be once the economic situation improves). If saving their pennies builds up over time, they may start seeing saving not as a function of putting away large chunks of cash, but rather as something they can accomplish in small amounts.

@MyTQuinn: People who are horrible at saving are not necessarily horrible at spending. My boyfriend, infuriatingly, refuses to open a savings account (for murky reasons I don't quite understand), but pays his credit card bills in full every month, is very diligent about monitoring his balances and makes spending decisions accordingly, and has perfect credit. He just has a weird aversion to savings accounts.

I started KTC 3 years ago, and LOVE IT.

Basically, here's how I do it:

First 3 months, they mathc you $ for $ up to $250, so if you make 3 purchases of x.01/day, you are well over the $250.

When I get my AT&T bill in, I will start paying off the bill $2.01 at a time. Add that to normal spending, and I always meet the $250 by 3months... I do not spend A LOT of money, but I use my debit card for everything... even a 35cent pack of gum (yes, you can still find gum that cheap!)

Also, what's great is even though each year they dont match the first 3 months dollar for dollar, they do allow (or just don't notice) that you can open up a NEW checking/savings with KTC. This is my second year doing this, and i will be getting my match paid next week on the 18th.

It requires a lot of patience to get the rewards, but if you are a college student like me with little money, an extra $250/yr is definitely worth it. (Hell, you can buy Ramon noodles one pack at a time, but fuck, don't be a bad/annoying consumer and pull that!)

Here's the deal. I've had it for 2 years now. The first year I got over $100 in matched "keep the change" funds deposited into my savings for free. The next year it was like $20 or something.

I don't save a ton of money with it. It averages like $12 a month. So for average people it is in no way a replacement for a savings plan. But I have a real savings plan, that I use with an online savings account.

So for 20 free dollars a year, I let my fake BofA savings account grow and just transfer it over when I need that extra $30 for silly things that I can't justify taking out of my checking acct.

Bad idea? Good idea? Neither. It's just kind of neutral, as long as you know what you're doing with your money.

@Juliekins: American Express Costco TrueEarnings is better than Amex Blue Cash--even if you aren't planning to visit Costco. Ever. (Unless you never buy gasoline or eat at a restaurant.)

I also thing it's a good idea. I save every coin I receive. Over this last year I managed to save $200 worth of quarters, so it really does add up.

I prefer putting in one lump sum at a time so I know exactly how much I put in when. Then I can be sure about the correct savings added every month.

I like the Wachovia version of this program, where they actually show bills raining from the sky in the commercials for it. "Wow, free money! Wait - it was already my money?"

And what would it take to get to that $250 max? Figuring an average of $.50 transfer per transaction, you would only have to make 10,000 individual purchases per year. Most people would probably be looking at $25 or less, and I guarantee you would come out ahead with a cashback credit card and scheduled transfers to a high interest online checking account.

Also, i forgot to add, but the KTC will not go through if it will cause an NSF. FOr example:

I have 10 in my account.
I make (4) 2.01 purchases in one day.
At the end of the day, it will take out 8.04 out.
However, since there is only 1.96 left in my account, instead of a transaction of "3.96 KTC" transfer going through, it will say "
KTC cancelled due to low balance"
(example screenshot here: [farm4.static.flickr.com]

Also, even though you can not access the "matched" change until your anniversary date, you can transfer back any transferred change that came from YOUR spending.

I hate the idea of this. I mean, if people couldn't balance their checkbooks before, then wouldn't taking money out of their checking mean they had more overdrafts?

I like Wachovia's version better. It's a $1 moved over for atm card transactions and also when I do billpay online. That adds up alot faster.

@Legal_Eagle_In_Training: Fair enough, but it will still draw down your checking account faster than otherwise, which will still lead to revenue-generation from overdraws on a large scale, I believe.

I would agree that it leads to overdrawing if you aren't careful or don't remember that your account has the "keep the change" going on. I'm a BoA customer, and while I've been somewhat against them and somewhat for them, I like this keep the change - its always fun to flip my **** for a second before realizing that my "missing" $$$ is actually in my savings - whew!

I was surprised at how many people I know were under the impression that the "change" that BOA was transferring into your savings was free money, not your own money. I had to explain that it was actually your own money from your checking account.
I think the program is a load of bull, and if people need to save, they should set up an auto transfer once a month, or take a look at their spending and see where they can cut back. I transfer 25% to 50% of my paycheck into my savings whenever my checking account starts looking pretty healthy. And my #1 rule is, never withdraw from the savings. (unless you're putting the money somewhere that gets better interest, of course.)

Here's why I dislike the program...

I got stuck behind someone at a supermarket u-scan with one of those type accounts. They would ring up a bag of ramen noodles, then pay. A jar of baby food, then pay, another bag of noodles, then pay. These people did about 15 transactions for small items. Good grief.

I honestly couldn't find the point in the keep the change program until you pointed out the matching part. Why isn't THAT in the commercials? The keep the change part was condescending and idiotic to me (so, they're moving MY MONEY to a new account, but I have no control over it?), but the matching part is nice. Stick it in a savings account, let it match, then move it to somewhere where I can make money on it.

If I didn't stick to cash for purchases, then I may have considered this. I'm actually now considering this. I'll talk to my accountant family and see their take on it.

I don't think that they're aiming to get people to overdraft because of this - If you're not already prone to overdrafting, I don't think that this is going to make it worse.

Really, I see it more as serving two functions:

1. People consider going to BofA for their checking account because it "helps them save"

2. It gets current BofA customers to use their debit cards more often, of which they get a 25-50 cent fee.

If you overdraft, well, that's gravy. But as was pointed out, they don't exactly pay hefty interest on their savings accounts, and in reality, most people aren't going to rack up that much in incentives anyway.

This is just another way for Bank of Opportunists to "keep the change" in their pocket. If you spend $4.50 and $5 is taken out of checking, 0.50 put in "savings", where you can't touch it but 7 times a month per federal law, they got a hold of your money for a good period of time.

Keep the change is a nice way to put aside a little extra money over time. You're not going to save a ton, but over time it still adds up.

Ben's concerns aren't really valid as far as I'm concerned:

1) If the thought of putting up to $0.99 into a savings account per transaction is enough to rationalize spending, chances are you can already find rationalizations to spend without this.

2) Yes, it's possible for your information to be stolen and your account drained, but luckily the vast majority of card readers haven't been tampered with. Plus, even though there aren't the same liability rules that credit cards have, banks tend to cover theft by card skimmers because it's in their best interest to have customers using debit cards.

3) If the money stays in your checking account, it's earning little to no interest anyway, so even in a BofA savings account, it's already earning you more than it did before. It's probably not a bad idea to move it to an account with a higher rate, but it's not going to kill you if you don't.

The bottom line for me is that anything that helps Americans think more about saving money is a good thing.

This quite a nice program only if a you use your debit card a lot. When I first signed up for the program and at the end of the first year I got like $100 from BoA, but remember it's only the FIRST 3 months that match 100%.

After that it's just a nice small piece of cash that BoA gives you.

If people think this will lower their account faster, you need to manage your money better. By god, at most it might take $1.50 if you use the debit card enough. The only time I "force" a large KTC transfer is at the pump, I usually set it to $XX.01.

It's a nice program for BofA, because they get you to hand over money. Instead of putting it into a decent interest-bearing account, you put it into a savings account with a below-inflation return rate, thus allowing BofA to get even richer lending out your money.

Remember, they are not doing anything out of the kindness of their hearts, or to encourage people to save because saving is a nice thing. If this program didn't generate profit for BofA, it wouldn't exist.

It is a great program. Just go to a gas pump and do as many transactions as you can. Make sure to do both credit and debit to maximize the number of transactions.

I got real good at pumping 3 cents worth of gas. This gets you up to the max reimbursement and is relatively hassle free.

Some gas stations put a block on your card if you use it 3 times at the same station in one day, or something. The bank may also think your card has been stolen and shut it off and call you when it sees you have used your card 18 times in one day at a gas pump, but it is easy to get all of that sorted out and fixed.