Keep The Change: How Bank of America Rounds Up Purchases and Puts the Difference Into Your Savings Account!

by Lynnette

banks, frugal tips

Change jar with dollar bills and coins in the money jar.Bank of America has started a new “kickback” program where you can literally save by spending!

It’s called “Keep the Change“.

In effect, Bank of America is giving its debit card users up to 99 cents per purchase and transferring that amount into the user’s savings account.

Sounds great, right?

“Every time you buy something with a Bank of America Visa debit card, we’ll round up your purchase to the nearest dollar amount and transfer the difference from your checking to your savings account free of charge. Because every bag of groceries, every coffee and every tank of gas adds up to more savings for you. So you get to keep the change and grow your savings. What could be easier?” –Bank of America

Truth is, the “Keep the Change” program just may be a better deal for the bank than for you.

Here’s why…


First, How It Works

If you spend $8.50 on a paperback book at the bookstore, the bank will round up that purchase amount to the nearest dollar and automatically transfer the difference (in this case 50 cents) from your checking account and put that amount into your savings account.

Better yet… for the first 3 months, Bank of America will match 100% of each transferred amount and put that match into your savings account — at no cost to you — in effect, DOUBLING your savings!

After the third month, Bank of America will match 5% of each of your transferred amounts and place their match directly into your savings account — at no cost to you.

If you’re bad at saving money, this may just work for you.


Little-Known Facts About The Program

Before you sign up for the “Keep the Change” program, there are a few things you should know:


  • The “rounded up” amount that gets credited from your checking into your savings is transferred in one lump sum daily. From there, it earns about one-half of 1% in your Bank of America savings account.
  • The matching funds contributed by Bank of America will be credited to your savings account annually (up to $250 per year), rather than daily like the funds which are automatically transferred from your checking account.
  • You must pay taxes on the “matched” amount come tax time.
  • Some (albeit relatively few) merchants actually charge you a fee if you use a debit card. In those cases, the rounded-up amount that gets transferred into your savings may actually be less than the fees charged by the merchant!
  • If you do not have sufficient available funds in your checking account on any given day to transfer the “rounded up” amount(s) into your savings, or if any transaction has overdrawn your checking account, Bank of America does not round up those purchases posted on that day and they cancel the Keep the Change transfer for that day.
  • While the “Keep the Change” program may cause you to save small chunks of change that you may not otherwise have been saving, if you were truly interested in saving & investing such funds, there are many other methods of saving which would yield much higher rates of return.
  • Banks earn a fee for every use of a debit or credit card in a transaction. These fees, called “point of sale” (POS) fees range from 25 cents to $2 per transaction. So, even if Bank of America gives you 5% of your “change” for each transaction, they are likely making more money from your transactions than they’re actually paying out.

    Check out this news video about Bank of America’s “Keep the Change” program, with helpful tips from Consumer Reports.

    –> Lots of interesting comments about Bank of America’s “Keep the Change” program at Ryan’s blog, 37 Signals.