Will New Checking Account Fees Have Any Effect on Bank of America?
I’m not sure how Bank of America does it, but they continue to have millions of customers. According to the Federal Reserve, Bank of America is the largest bank in the U.S. in terms of assets. Total assets are $2.276 trillion as of 3/31/2011. Note, that’s trillion which is 1,000 billion. I’m not sure of the source, but according to this Wikipedia BofA entry, Bank of America "has a relationship with 99% of the U.S."
For the majority of BofA’s checking account customers, it might have been the large branch network that pulled them in. Many readers of this blog may have become BofA customers when BofA acquired Countrywide, LaSalle Bank or other past banks. Other readers of this blog may have become a Bank of America customer due to past deals. They used to offer many checking account bonuses, and there used to be ways to get top rates on a Bank of America money market account (NEA members can still get decent rates). Also, some readers were able to profit from Bank of America’s Keep the Change Program.
Once people join, inertia often keeps them customers even when they no longer are receiving any good deals. Bank of America does offer one of the better online banking services, so that may help Bank of America keep customers.
Today’s Poll: Are You a Past or Present Bank of America Customer?
For today’s poll, do you still have an account at Bank of America? Or did you used to have a Bank of America account? Or are you one of the few Americans who have always been able to avoid Bank of America. If you are still a customer, what has kept you a customer?
Some recent changes at Bank of America may help overcome this inertia. New fees on Bank of America’s MyAccess Checking Account took effect yesterday. The monthly maintenance fee has gone up from $8.95 to $12.00. According to the BofA personal schedule of fees:
Effective with statement cycles beginning on or after May 24, 2011, the monthly maintenance fee changes to: $12.00
Also, it’s harder to have this fee waived. Any direct deposit used to qualify. Now it must be at least $250. From the fee schedule:
Have at least one qualifying direct deposit of $250 or more made to your account each statement cycle
An average daily balance of $1,500 remains as another way to avoid this fee. These changes look similar to the new fees at Chase Bank.
There also have been a change for the worse with the Keep the Change Program. Bank of America will no longer provide the 5% match for the savings-to-checking transfers that occur when you use your debit card. However, they still have the 100% promotional match for the first 3 months. Since the 5% match was never that good of a deal, this doesn’t have much effect on the program especially for bonus chasers.
We may see more fees and fewer perks at Bank of America as new regulation impacts past sources of fee revenue. Bank of America and many banks used to make a lot from overdrafts, but regulations have forced them to change overdraft policies. In fact, Bank of America just recently settled an overdraft lawsuit. I’ll be surprised if Bank of America keeps the 100% 3-month match on the Keep the Change Program when the new debit card interchange fee regulation takes effect.
Free Checking Alternatives
With credit unions, community banks and internet banks, there’s no reason to pay maintenance fees at Bank of America or any other mega bank. Three internet banks that offer free checking accounts are ING Direct, Incredible Bank and Ally Bank. Ally would be the best choice if you want paper checks.
For credit unions, Alliant Credit Union has one of the best free checking accounts.
And don’t forget that the vast majority of high-yield reward checking accounts are also free checking accounts with no monthly fees even if you don’t meet the debit card usage requirements. If you’re new to reward checking, my post on the 10 common traits of high-yield reward checking accounts should be useful. There are still many local deals that are better than what’s available nationwide. You can find these in our reward checking account rate table. Be sure to use the "Filter Accounts" button above the table to compare accounts in your state.
Dave in California
> (according to the rep with whom I spoke) a “permanent waiver” which frees
> me of any charges as long as the account is active.
I had those permanent ("VIP") waivers on 3 BOA accounts (1 checking, 1 joint checking, and 1 savings) for going on 10 years now -- I didn't carry any significant balances (never more than $3,000 across all 3 accounts) -- it was just "useful" to have a relationship with BOA.
Last month I got 3 letters (individually mailed but received on the same day) starting with: "We occasionally reevaluate our account terms..." and BOA was kind enough to communicate (up front!) they were going to be charging me a total of $36/month for the accounts going forward.
I went to the branch to close the accounts; the guy that had originally set me up as "VIP" was no longer there (it has been 10 years).
The rep half-heartedly asked if there's any way to save my business (sounded scripted), but he was not able to restore the "VIP" setting they had promised me "forever" back in 2001. He said he had been closing a lot of accounts that week and there wasn't anything he could do.
So I no longer have any BOA accounts. Hope you have better luck!
I really like BofA's Bill Pay. I use other banks accounts as funding sources to pay for my BofA visa and other bills all the time. No other bill pay allows that, as far as I know.
Another thing I respect a lot is BofA's SafePass (for credit cards). It's not a checking account thing directly, but it keeps me almost strangely "attached" to this bank.
And I just never had any issues with BofA making any mistakes with my money. I like their mobile banking, which is improving, I like their login safety features with the option to be texted for a code if I try to log in from a new computer.
Now, I'll have to be careful to avoid fees. My savings are elsewhere, incurring the best interest I could find. But BofA is still a very useful bank, for me.
By the way, the banks seem to just change the account name and start charging you when they want to. So even having one that is supposed to be permantly free means nothing.
Although I have utter contempt for B of A as part of the blood sucking megabank TBTF culture, I will say their website is good and the SafePass is a great concept which I have used a few times. Other than that, I would get rid of them in a second except the credit limit I have with them is significant and longstanding, so cancelling the account would adversely affect my credit score for awhile - so as long as they don't try to charge me for inactivity I will continue to use them, I just won't feed them.
For now, I will stick with them till December. That's when my "auto debit" for insurance will stop being taken from this account. I will then close the account then since I'm now using USAA checking that offers remote deposit.
There are not many BoA branches near me, plus using remote deposit is great.
BoA is slowly going downhill in my opinion.
Also, if Ally starts remote deposit, I'll be on board with that.
I have never paid a fee of any kind to BOA.
I became a BofA customer when they acquired Maryland National, which was my primary checking account. They promptly closed my local branch and moved it to a regional mall, so I severed the relationship. I became a customer again when they affiliated with American Association of Individual Investors (AAII) to provide bonus interest rates to members. They trashed that deal by becoming extremely uncompetitive, so AAII moved on to Discover, and I again severed the BofA relationship when my last CD with them matured.
Alliant is vastly better in terms of offerings, service and website design.
I have several accounts, have had few problems, and very much appreciate the Bill Pay and Transfer services, and the general accessability of their on-line banking. Too, particularly in California but often in unexpected "foreign" locations, you can find a, often helpful, brick and mortar branch when you need one. Their CD rates fail to be at all competetive (see highly rated, brick and mortar, One West in California), so go somewhere else for that; and they are a bit "fee happy", but keeping a substantial amount on deposit avoids that problem (at least so far). Glad B of A is around. If their stock drops back to the former "crisis" level, or even much under $10, buy some, I will.
I used to work on a cruise ship (I'm not American I'm European) and that was several months ago but I opened a BOA debit card with the I<3NY logo thingy... anyway I never used it .. I may have activated it because I tried to use it from the ships ATM but I'm not sure it processed. Never put any money on it or anything.. 2 or 3 months after that I got a -23.74$ on it via regular mail.. Few weeks after that I quit my job and moved back home which BOA has the address from... Then I moved out of my country and went somewhere else.. It has been maybe 6 or 7 months and now I just remembered that I have the card. My question is should I call BOA and ask about my account and have it shut down or cancelled or anything or should I just keep quiet or what .. I'm just too scared to even call and ask .. PLEASE help
I had a structure of seven or so free checking accounts that dealt with various things I wanted to save for. It was beautiful. My salary would be direct deposited, then automatic transfers would split it between all the accounts. Vacation, Savings, Auto, Fixed Expenses, Investing, Spending money etc. I would know exactly how much money I had for all my expenses.
And now they are going to charge fees for them? I wish they didn't hold my mortgage. I'm still leaving though. Thinking ING