Details of Bank of America's "Keep the Change Program"
Save as You Spend
Saving is easiest when you automate the process, and there are several ways to move funds into a savings account without needing to take any action. Options include Bank of America’s Keep the Change program, Wells Fargo's Way2Save, and apps that round up your purchases to the next dollar.
After enrolling your debit card into the program, Bank of America automatically handles the logistics.
For example, purchasing a cup of coffee can lead to extra money in your savings account:
- Coffee Price: $1.43
- Round Up: $0.57 (deposited to savings)
- Total Charge: $2.00 (total amount deducted from your checking account)
That extra $0.57 goes into a linked savings account, and the idea is that you barely notice the extra "cost" in your checking account. If you make several purchases throughout the day, that might add up to a few dollars of savings every day—or a decent monthly addition to your savings. You can also use your card for automatic monthly payments to boost your savings.
This approach might be similar to a holiday savings account, which you build up slowly throughout the year with the intention of having a few extra hundred dollars by year-end.
Does it Help?
If you need a little extra help getting motivated, or you’d benefit from tricking yourself into saving, this program might do the trick. Unfortunately, it’s unlikely to make a significant impact on your big-picture finances.
The amount of money you save might or might not be enough to make a difference in your life, and you take control of how much you’re saving.
While this is far better than nothing, It’s best to get proactive: Make a plan and actively decide how much to save. In that process—which doesn’t have to be overly complicated—you get a basic understanding of your financial situation. You monitor how much income you bring in, where your money goes, and any opportunities for improving your finances.
An even better strategy might be a “pay yourself first” approach. To do that, budget for a certain amount of savings each month, starting with an amount you know you can afford and that will help you make progress toward your goals. Then, there are two ways to get that money into savings:
- Treat your savings like a required monthly payment, and transfer the money manually each month.
- Automate it. Set up a recurring monthly transfer from your checking account to your savings account.
By intentionally putting money into a savings account, you’re plugged in to your financial goals. Plus, moving that cash prevents temptation because you know the money is earmarked for something besides immediate spending.
If you’re already doing that and you want to use Keep the Change as a supplement, that’s great. You’ll thank yourself later for having the extra money.
No More Matching Funds
Bank of America no longer matches your contributions through the Keep the Change program. In the past, you could earn a dollar-for-dollar match during the first three months, and an additional 5% of your rounded-up contributions after that, with a maximum match of $250 per year.
Without the match, you’re saving your own money instead of getting help from the bank, which is still better than nothing.
Several other banks and mobile apps perform similar services. While these strategies sound neat, successfully reaching your goals requires boring tasks: reviewing your pay stubs, tracking your spending, doing a little bit of math, and making some choices. When you're intentional with your saving, you don’t leave everything to chance.
Keep the Change and similar programs may be more of a strategy to generate interchange fees for banks. Each time you use your debit card (particularly as a “credit” transaction), Bank of America stands to earn a small portion of the total transaction amount. Plus, increased engagement makes you more likely to keep using Bank of America. They encourage you to put all of your monthly bills on your card, and this may serve them more than it serves you.
But don’t let that stop you! If you come out ahead with Keep the Change, please use it. It may be more feasible for you right now than setting up automatic transfers, and that’s perfectly fine. The most important thing is that you take action and save more tomorrow than you’re saving today.
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