By MyBankTracker  Thu Oct 21, 2010

Bank of America Free Checking Discontinued

Bank of America made a big change to its most basic account this week, announcing it would no longer offer completely free checking. The bank’s free checking will now come with stipulations such as balance requirements or out-of-branch-only banking. The move from one of the nation’s largest financial institutions could signal a sea change in the way banks handle free accounts.

Rumors of banks ditching free checking programs have circulated since politicians signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. First, Wells Fargo announced its plans to curtail free checking for new customers. Now Bank of America is hopping on the same bandwagon.

Bank of America Makes Shift

Bank of America, one of the world’s largest financial institutions, announced earlier this week its plans to change how it conducts business with customers. The most dramatic shift is the near-elimination of free checking.

In August, Bank of America launched an eBanking account that offered a free checking account to those consumers who banked without the use of tellers or branch services. The catch to having this free account is that you would need to pay $8.95 to access bank tellers or paper statements to make basic transactions that would otherwise not be available.

Bank of America Branch

Another feature Bank of America began offering to offset financial overhaul losses was the “Emergency Cash” option, charging customers $35 to make withdrawals from ATMs exceeding their account balance. This charge differs from an overdraft charge because the customer needs to explicitly accept the $35 charge to obtain the emergency cash.

Many critics say the reason free checking accounts are disappearing is because banks have lost a massive amount of revenue due to the regulation of overdraft fees as well as interchange fees.

Anne Pace, a Bank of America spokesperson, had a counter argument: “Customers never had free checking accounts, they always paid for it in other ways, sometimes with penalty fees.” Pace made the argument that the title “Free Checking” always had its fine print and clauses, the difference now is that the clauses are changing.

Some Still Offer Free Checking

Although discussions about getting rid of free checking have been happening for months, Bank of America is one of the first banks to publicly announce changes to its checking accounts. Some banks are struggling to keep free checking around and other banks are insisting they are keeping free checking. There are still plenty of checking accounts that offer good deals for their services:

Although all of these accounts have good features and offer rewards make sure you check out the fine print and see how long these offers last. Make sure to check out any hidden fees that also maybe attached to these accounts.

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Add Your 2 Cents

  • Carbang

    Bank of America E banking account does not limit you to only using “out of branch” means to do business! Just certain transactions that could be done online or at atm just as equally as with a teller might trigger a monthly fee. You can still come into the banking center and conduct business with many other transactions or requests.

  • Carbang

    Bank of America E banking account does not limit you to only using “out of branch” means to do business! Just certain transactions that could be done online or at atm just as equally as with a teller might trigger a monthly fee. You can still come into the banking center and conduct business with many other transactions or requests.

  • http://www.MyBankTracker.com Asher

    Carbang,

    If you are a Bank of America eBanking customer, you will trigger an $8.95 monthly fee when using a teller to make a deposit or withdrawal or requesting a paper bank statement. You are only assessed a fee for the month in which you use the in-person deposit/withdrawal service or receive a physical statement.

    You can use the branch and the teller for other purposes free of charge. The way to avoid the fee is to only make deposits or withdrawals via “self-service” means: through an ATM or in-branch lobby kiosk. You should also make sure you receive paperless account statements through Bank of America’s online banking system.

    Hope that clears everything up! Bank of America’s eBanking fee schedule is available here: https://www2.bankofamerica.com/deposits/odao/popup/disclosure_popup.cfm?template=sofCHDY

    Thanks for reading and contributing!

  • Small Business Owner

    Asher, this is not true. I followed everything to the letter, and still got hit with the fee. I understand that banks are in a tight spot, but the only reason I went with BoA was for the free checking. I received no notice that the policy would change.

    As a business owner myself, I *know* this under-the-radar change is just not OK. I would never do this to my customers — this is not good service, nor does it build good will. I am switching all of my accounts, even though it’s extra effort… even if those accounts at the new banks have fees… just because of this. I feel very untrusting, now.

  • guest

    It is amazing that once again big banks make more money from the consumers. I wonder why its called the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The consumers are obviously not protected.  My interest rate on credit cards and late payment fees have gone up more since the act than before.  As always, it’s main street left with the price tag.