Keep the Change Overview
This is a great idea! For those of you that haven't heard, Bank of America has a program called Keep the Change to help customers with their savings. For every transaction made with their Bank of America debit card, the amount of change required to round-up the transaction to the nearest dollar will be transferred from their checking account to their savings account. The idea is that the small amounts will happen automatically, and will not make a big dent in the funds availability of the checking account.
More Keep the Change Benefits
To sweeten the deal, Bank of America has offered to match 5% of the amount transferred, up to $300 per year. While that may not seem like a lot, it would add up, especially if you use your debit card often enough. They'll even give you 100% of the leftovers for the first three months. Sounds good to me!
Keep the Change versus credit card Rewards
If you have a rewards credit card, those savings might not seem like such a big deal. I have several rewards credit cards, and decided to only use my Bank of America debit card for small transactions, where the on average 1% reward would be too small to benefit.
Update - April 5, 2006
I just saw on Nightly Business Report that this program is doing extremely well. Bank of America has stated that over two million customers have signed up for "Keep the Change", and they have opened up over eight hundred thousand new savings accounts.
Since you cannot protect the intellectual property of financial banking products, I expect to see some copycats come up with products similar to "keep the change". Like savings accounts in general, this is good for both banks and customers. If I understand banking products correctly, banks are required to keep 20% of the money in checking accounts in reserve (meaning they cannot lend it out) as opposed to 0% kept in reserve in savings accounts.
Related Pages
Last edited: 2006-12-29 17:26:02 |