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.