If you're regularly guilty of spending more money than you have in your checking account, Bank of America is hoping to catch your attention.
The banking giant has announced a new checking program called SafeBalance that eliminates the potential for overdraft fees for account holders. Just like other accounts at the bank, SafeBalance includes access to online and mobile banking, ATMs and call centers. However, Betty Riess, a spokeswoman for Bank of America, says the account comes with two important distinctions: no paper checks and no overdraft fees. The account has a $4.95 monthly fee that cannot be avoided.
Greg McBride, CFA, Bankrate's senior financial analyst, says that SafeBalance will appeal to a small segment of account holders who habitually overdraw their accounts.
"Those customers want transparency with one flat monthly fee," McBride says. "There are only a few offerings in the marketplace that can appeal to them right now."
The account is even getting some applause from an unlikely source: the credit union community.
"Bank of America’s new checkless checking account is exactly what civil and consumer rights advocates have been requesting for years from the nation’s largest banks," says Martin Eakes, CEO of North Carolina-based Self Help Credit Union. "For students and customers of modest means, this new account is perhaps the best product available in the market today."
Currently, the account is only available in Rhode Island, Michigan, Oregon, Virginia, Maryland and Washington, D.C. Riess says that the bank expects to make SafeBalance available throughout the entire country later in the year.
Bank of America isn't alone in its efforts to appeal to customers who have struggled to manage their accounts. Many members of the banking industry are promoting prepaid cards that eliminate overdraft fees, too. Bank of America's checking account is priced to compete with the Chase Liquid card, a prepaid offering that also has a regular $4.95 monthly fee.
What do you think of SafeBalance? Would you rather pay $4.95 per month for a checking account or a prepaid card?