In January, another bank got rid of the free checking account option as Bank of America did away with their e-checking account.
Since the announcement was made, Bank of America has been put under fire by the media and their customers. This change is looked at as a target to low-income users who will find it difficult to cope with new fees and new requirements. Many customers have taken it upon themselves to start a petition to ask Bank of America to do away with these fees and the requirements with the number of signings exceeding 46,000.
What most customers are not aware of is that this free checking account was discontinued back in 2013. Bank of America has just recently finished completely migrating users over to their now core checking account, which they feel gives users more access to their banking. This core checking account requires a $12 monthly fee, but Bank of America does provide several ways to waive this fee.
Betty Riess, Spokesman of Bank of America, said customers are provided with options to have the $12 fee waived. She also mentioned that the $250 direct deposit minimum was among the lowest when compared to other banks.
“Customers can have the fee waived by having a weekly direct deposit of $250, which is one of the lowest qualifiers in the industry. The fee is also waived for students under the age of 24, for customers who have a minimum account balance of $1500 and for customers enrolled in certain tiers of our Preferred Rewards program,” said Riess.
While these requirements are mangegable for most they can be tough on low-income customers. Bank of America does acknowledge that as they do offer a lower-priced option. Bank of America calls their lower priced option the SafeBalance account. The SafeBalance account has a low monthly fee of $4.95. The account does not allow for customers to overdraft money from their account and is primarily designed to help customers manage their money and spend only what they have. This can be seen as beneficial for low-income customers.
The e-checking account came with a monthly fee of $8.95 and was designed for tech-savvy customers who preferred their banking on the go. The fee was waived if customers chose to not receive paper statement and did not use a teller for their routine transactions. These requirements seem fitting since the account was designed for those who wanted their bank accounts at their fingertips. It is also important to note that the e-checking account limited access to the branches while the core checking account allows customers to have full access to all of Bank of Americas channels.
Bank of America may be on the hot seat but they are not the first to establish fees on their checking accounts as the recent years have shown several banks make this move. With this way of banking becoming the norm it is tough to to say that Bank of America are targeting low income customers as their fees and requirements are among the lowest in cost to keep an account open.
Those who bank with Chase for example, are required to have the same daily balance at $1,500 to avoid the same $12 maintenance fee. Also, like Bank of America, the fee can also be waived through a set amount of direct deposits each month. The difference being that Chase asks for at least $500 in direct deposits. This is significantly higher than what Bank of America offers at $250 showing that they are willing to ask for less in order to make things affordable for their customers.
With some banks getting caught up in scandalous behavior it is becoming harder and harder for society to trust any of the banking options. Especially as a low income customer who cannot afford to lose their money to fees that they can not keep up with. Many believe that free checking accounts should be the standard but the banks seem to think otherwise. While there are several options available that do not require any fees or minimum balance the number is slowly, but surely, becoming less and less.