Bank of America - They're Keep'n the Change!

[japes]

Bank of America has this "really cool" program where they round up all your debit card transactions to the nearest dollar. So, for example, if you buy something for $1.50 they round that up to $2.00 and give you $0.50. When I first heard this offer I was thinking there HAS to be catch! Everyone I asked at my local branch simply said, "There's no catch." I tried the program for the hell of it. But something odd started happening. Pennies began moving from my checking account to my savings account and I didn't see any new deposits. Why the heck was MY money moving from checking to savings!!? It turns out BofA is really just doing a matching thing. They will match the rounded up amount which is automatically being moved into my savings account. They pay out annually. They only match 100% for the first three months, then it's 5% matching after that. In the meantime I have ton of these stupid little transfers from checking to savings!! None of these things were explained to me thoroughly by the tellers who sold me on the program (there's no catch).

So, ladies and gentlemen, why is BofA bending over backwards to get my money into savings? Here's my guess (I'm new here, I've only recently taken the red pill and I'm about to throw up). The obvious thing is BofA encourages the use of a debit card for the processing fees. I get that. The not so obvious thing is (I believe) savings accounts fall under the M2 category of money and banks have no reserve minimums on those accounts. Having my money in savings makes it cheaper for BofA to create money out of thin air. The paltry 5% they will eventually match is well worth it to them.

How did I do?

 

[Seraphim]

How did I do?

Good job actually. Thanks a lot for the info.

Fuckin' fascist banks. I'm seriously thinking about finding a local credit union.

 

[Arklatex]

Sounds like the fractional reserve banking guys are up to it again, creating money out of thin air. They don't want you to use it ofcourse, just inflate their reserves.

Meanwhile they are probably increasing their fees, I know my online banking use to be free. Well last time I logged into my account it wouldn't let me access it unless I clicked "ok" after "I must carefully read the agreement".... the agreement was $5 forced fee for online banking. I HAD TO AGREE TO IT!! Otherwise I was going to be late on a payment. Ofcourse it didn't come right out and say it, it was pages and pages of legal jargon with first whole page nothing but definitions! Who is going to read that stuff! Everyone just clicks ok. They are scammers. Some people are experts at controlling cattle, some people are masters at controlling elephants in a circus, well these guys are masters at mind controlling humans. I'm sick of it and waiting for everyone else to stick up for themselves and say enough is enough.

What is hard is a lot of people are content, they have a nice salary. All the smart people are "paid off" and put up with getting nickeled and dimed. WE need to stick up for each other and quite sticking up for the banking system. Everyone should withdrawal their bank accounts and buy water food gold copper and silver, etc. real things.

Ofcourse they have a methods of forcing you to keep your dollar account like taxes and mortgage payments. They inflate the cost of everything so you have to get a loan and making dollar payments each month.

The Lion of Judah has been watching.

 

[Icymudpuppy]

I only bank local. Local small town bank or local credit union are definitely the way to go. BOA, CHASE, CITIBANK, ETC can go F themselves.

 

[amonasro]

I just read that Chase was getting rid of free checking too and charging like $10 a month now. Ouch.

I actually like the new rewards program with my bank, Fifth Third. It's based on a point system so most debit card purchases net you a certain number of points which can be redeemed for gift cards, travel or just cash deposited into your savings account. They also allow you to link family members' cards for faster accumulation. It works out that I can redeem $50 every couple months and it goes straight into our account. For a bank, its not too shabby.

 

[japes]

I definitely don't mind BofA giving me 5% on the change but it's how they are doing it. I didn't realize they would be taking the rounded up change out of my checking account, then matching it once a year. They made it sound like I would simply get the change deposited in my checking account. Now that I'm learning about the reserve system I begin to understand why they want that money in a savings account.

I'm seriously considering moving my money to a different bank, maybe a credit union like others have suggested.

 

[Romulus]

I only bank local. Local small town bank or local credit union are definitely the way to go. BOA, CHASE, CITIBANK, ETC can go F themselves.

Ditto that! Get out of those banks FAST. Use only a local, regional bank or a credit union.

 

[pmbug]

...
I'm seriously considering moving my money to a different bank, maybe a credit union like others have suggested.

http://www.ronpaulforums.com/showthread.php?273256-Wikileaks-Tweets-Pull-your-money-out-of-BofA

 

[Tinnuhana]

Japanese people can "bank" at the post office. A couple of years ago, they privatized the postal system. But I think the old post offices offered bank services, too. That's why people can pay their utility bills at post offices (and also at Family Mart (the local 7-11). Several years ago, a law was passed that said SOFA status US citizens could not have accounts at Japanese banks. So I lost my local account.
My Community Bank account (BoA for military) gets my pay check. I also have a Pentagon Federal Credit Union account, though it has a minimal amount in it. I can't get yen at the PenFed bank. I hear the Navy Fed. Cred. Union is better than PenFed. I'm considering transferinf more money over there, since I can get a better yen rate on the economy than I can at BoA. I've had many problems with BoA, but don't know quite how to break off the relationship, since at least I can make withdrawals when I'm in the states.
Credit unions are better because they can be as picky as they want with loans, so they don't have as many delinquent loans messing up their books.Some employers have credit unions. They're worth looking into.

 

[japes]

Credit unions are better because they can be as picky as they want with loans, so they don't have as many delinquent loans messing up their books...They're worth looking into.

Definitely! I'll start looking.

 

[Pants]

well

I do my banking at the credit union.. It is better than the big bank. I dropped Wells Fargo after they charged me $3.00 for not ripping off all the perferations on a $2.00 rebate check i got in the mail. It was probably 5 seconds of work to do it, and I bet the employee who took the time to rip off my perferations got a little extra nothing in their paycheck.

Bank of America has my mortgage and they are crap to deal with. Whenever I call them i get people from India and I can barely understand what they are saying. Whenever I call them, they always talk me down like I don't know what I am talking about.

Definitely! I'll start looking.

 

[devil21]

Bank of America has this "really cool" program where they round up all your debit card transactions to the nearest dollar. So, for example, if you buy something for $1.50 they round that up to $2.00 and give you $0.50. When I first heard this offer I was thinking there HAS to be catch! Everyone I asked at my local branch simply said, "There's no catch." I tried the program for the hell of it. But something odd started happening. Pennies began moving from my checking account to my savings account and I didn't see any new deposits. Why the heck was MY money moving from checking to savings!!? It turns out BofA is really just doing a matching thing. They will match the rounded up amount which is automatically being moved into my savings account. They pay out annually. They only match 100% for the first three months, then it's 5% matching after that. In the meantime I have ton of these stupid little transfers from checking to savings!! None of these things were explained to me thoroughly by the tellers who sold me on the program (there's no catch).

So, ladies and gentlemen, why is BofA bending over backwards to get my money into savings? Here's my guess (I'm new here, I've only recently taken the red pill and I'm about to throw up). The obvious thing is BofA encourages the use of a debit card for the processing fees. I get that. The not so obvious thing is (I believe) savings accounts fall under the M2 category of money and banks have no reserve minimums on those accounts. Having my money in savings makes it cheaper for BofA to create money out of thin air. The paltry 5% they will eventually match is well worth it to them.

How did I do?

Are you sure that's how it works? I don't have that program but I remember it being called "Keep the Change"? I thought what they did instead was when you buy something for $1.58, they round up to $2.00 and transfer the difference into your savings account. They don't give you money, they just move your money to your savings account so you can save a little easier. It may have changed but that's the program I remember.

 

[angelatc]

Dude, I'm sorry you didn't understand it, but I was pretty clear on how it worked just from seeing the commercial. You're mad because you didn't?

I think they're moving money into savings in order to discourage spending. With inflation, savings are pretty much getting negative interest - taking money back out of the system.

 

[japes]

Are you sure that's how it works? I don't have that program but I remember it being called "Keep the Change"? I thought what they did instead was when you buy something for $1.58, they round up to $2.00 and transfer the difference into your savings account. They don't give you money, they just move your money to your savings account so you can save a little easier. It may have changed but that's the program I remember.

For the first three months they match 100% of "Keep the change". After that they match 5%. They only deposit their part of it into your savings account annually. In the meantime, they move YOUR change from checking to savings. That's how it works.

Dude, I'm sorry you didn't understand it, but I was pretty clear on how it worked just from seeing the commercial. You're mad because you didn't?

I think they're moving money into savings in order to discourage spending. With inflation, savings are pretty much getting negative interest - taking money back out of the system.

I'm not really that upset about the program -- whether I understood it or not. I'm more fascinated about what is really going on here. It seems to me they are working very hard to get my money into savings. They aren't doing this for me I guarantee it. I'm undertand (and please correct me if I'm wrong) that BofA has no reserve requirements for savings account money. This money falls under the M2 category of money and therefor it costs BofA less to loan it out (inflate it). See this quote from the Federal Reserve Bank of New York:

http://www.newyorkfed.org/aboutthefed/fedpoint/fed45.html
Reserve Requirements and Money Creation
Reserve requirements affect the potential of the banking system to create transaction deposits. If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+...=$1,000). In contrast, with a 20% reserve requirement, the banking system would be able to expand the initial $100 deposit into a maximum of $500 ($100+$80+$64+$51.20+...=$500). Thus, higher reserve requirements should result in reduced money creation and, in turn, in reduced economic activity.

In practice, the connection between reserve requirements and money creation is not nearly as strong as the exercise above would suggest. Reserve requirements apply only to transaction accounts, which are components of M1, a narrowly defined measure of money. Deposits that are components of M2 and M3 (but not M1), such as savings accounts and time deposits, have no reserve requirements and therefore can expand without regard to reserve levels. Furthermore, the Federal Reserve operates in a way that permits banks to acquire the reserves they need to meet their requirements from the money market, so long as they are willing to pay the prevailing price (the federal funds rate) for borrowed reserves. Consequently, reserve requirements currently play a relatively limited role in money creation in the United States.

 

[Kregisen]

Are you sure that's how it works? I don't have that program but I remember it being called "Keep the Change"? I thought what they did instead was when you buy something for $1.58, they round up to $2.00 and transfer the difference into your savings account. They don't give you money, they just move your money to your savings account so you can save a little easier. It may have changed but that's the program I remember.

Yeah that's how I learned it too. There's no "catch" to it because it's nothing special. All it does is round up and transfer to savings...

The M2 question is interesting. If I remember correctly, I think you're right...I believe checking is counted in M1 and Savings in M2, but I don't quite remember.

 

[angelatc]

I think this program predates the changes to the reserve requirements, though. It goes back to at least 2005 - maybe farther.

ETA: From a Business Week article:

How did Bank of America create Keep the Change? In the spring of 2004, it hired an innovation and design research firm in Palo Alto, Calif., to help conceive of and conduct ethnographic research on boomer-age women with children. The goal was to discover how to get this consumer segment to open new checking and savings accounts.

http://www.businessweek.com/magazine/content/06_25/b3989445.htm

Speaking as a boomer aged woman with children, I love the idea of this program. Not enough to switch from my credit union, but I think it's an easy way to save.