On the Beat: Keeping the change, and the customers

A few weeks ago, I noticed Bank of America promoting a new program — new to me, anyway. The free product for personal accounts is called Keep the Change. It's tied to BofA customers' checking and savings accounts. Every time an enrolled customer uses his check card, the amount deducted is rounded up to the next dollar. If your Happy Meal costs $3.71, you see a debit for $4.00 with the Keep the Change icon next to it when you view your statement online. The Golden Arches gets paid and 29 cents gets rolled into your savings or money market account.. On top of that, for new program enrollees, Bank of America matches 100 percent of the money rolled over for the first three months and 5 percent every month after that up to $250 annually.. I think it's a great idea. Saving intimidates me. To make any kind of dent, I feel like I need to put $50 or $100 into savings at any one time, which is too much for my budget. However, the pennies, quarters, nickels and dimes I don't miss so much. I also think it would be a great way to start saving for my kids' college funds or for grandparents to start a savings account for grandkids. Since its inception, the program has helped enrolled customers save more than $10 billion, including $1 billion through rounding up and matching funds as of May 2008.. I recruited a few of my friends as guinea pigs to see how much they would save if they were BofA customers. Alan works as a graphic designer. He is part of a family of five which has two full-time incomes. For the month, he tallied 57 transactions which would have rolled $31.92 into a savings account. Of the test subjects, he was the big winner.. John is a single guy with a good income. He tallied for seven days which included one trip for fun to the U.S. Open in New York. He would have saved $5.93.. Sara and Steve are double income, no kids and live near Washington, D.C. They tallied $5.46 for savings in one week.. As for me, I get my main paycheck once a month so my debit card expenditures are obviously higher right after payday. For my joint checking account with my husband, we would have saved $9.52 for one month. If I kept up that level of saving, with the BofA match for the first year, I would have saved $147.12 without pain.. However, the concept does have its detractors. One of my potential guinea pigs balked at participating. (Keep in mind, none of us have accounts at BofA or firsthand experience with the program.) Andrew decided not to participate.. "Why would I want to automatically take money from my checking and put it into my savings? That would be one heck of a headache to follow and verify that they were doing it right," he said. "Why would you not just transfer into savings yourself?". "Have you ever put change from your pocket onto your dresser? Or into a jar? In the ashtray? That all adds up fairly quickly — unless you're paying 50 cents per load for laundry. And you don't miss pennies like you would transferring $20 or more at a time," I responded.. "Yeah, but when you use your debit card that is an 'active' account that you use as a primary source of income-expenditures, as opposed to cash which is a set amount. Meaning, I take out $20 cash, I can only spend $20, and I know how much I took out. If I have change left over, I use it at another time," Andrew explained. "When I use a check card, I keep receipts and know when balancing a check book that I spent $9.23 and that is all. This process means you need to remember more than what you spend is being taken out of your account and all the more easy to overdraw yourself." He also wondered about penalties for repeatedly transferring money back into checking account.. From a bank's perspective, the Keep the Change program helps cement relationships. To use the program, customers have to have "checking and savings accounts with us. For us, it deepens the relationship with the customer," said Diane Wagner, bank spokesperson. Since the program's inception in October 2005, more than 8.4 million people have enrolled. "Others in the market may have something similar; [their] numbers can't compare with what we're seeing. People see it as a very effective way to save without thinking about it.". Wagner briefly explained some of the details of the bookkeeping. "A customer can almost see in real time — an icon says what I've saved to date. Each time you check your account, you can see transactions pending, can see Keep the Change transfer, can see what that amount is.". The product, which has a patent pending, was what customers told BofA they wanted. BofA helps "jumpstart folk's accounts," Wagner said. "Why match funds? We're doing the right thing for the customer. We value their relationship; want to get them on the right track. We're rewarding the customer for their business.". If you have multiple checking accounts, BofA will use the account associated with your check card. If you have multiple check cards associated with your checking account, each check card will be automatically activated for Keep the Change. Rewards cards are not eligible for the match.