Not to be out done, Bank of America announced its plans to introduce a new selection of checking accounts that bring with it a tiered checking fee structure.
America’s largest bank plans to roll out their new checking accounts through a pilot program that will be tested in Arizona, Georgia and Massachusetts beginning this month. With the plan to expand the program across the country in the second half of 2011.
Back in October we highlighted the decision to discontinue their Free Checking. Shifting their focus to a new account called eBanking, which they launched during the summer of 2010. The new tech-savvy account was designed for those consumers who banked without the use of tellers or branch services.
While not fully confirmed, it seems under the new program, consumers will have a choice in how they pay for their accounts. Options, such as linking multiple accounts, or opening credit card with the bank would allow you to avoid fees as high as $25 a month. This move slightly mirrors a direction deployed by Wells Fargo, which forced customers to extend their relationship to multiple accounts to avoid fees.
Not much is known of the new fee structure, but NPR was able to learn that customers will have the option to apply for monthly fees of $6, $9, $12, $15 and $25.
Bank of America’s New Checking Account Model
The new model offers four types of checking accounts:
- Bank of America Essentials: designed to be the most basic of their four accounts, the new checking account carries no minimum deposit. Unlike the other accounts, this option will probably require a high direct deposit, along with a minimum average daily balance. We expect the fee to be in the $6 – $10 range.
- eBanking Account: as we highlighted above, Bank of America rolled this account out last year. It carries no monthly fee when you choose online paperless statements and make your deposits and withdrawals online or by ATM, with out a teller, otherwise the fee is $8.95 per month.
- Bank of America Enhanced: unknown if this account will offer a tiered interest rate, do expect the monthly fee to be between $15 and $25. This option will also carry a monthly fee that could be unavoidable, unless you maintain a $2,000 balance or $5,000 in combined balances through linked BofA account, such as a savings or an investment.
- Premium Checking: Their new top tier checking account requires a minimum balance of $20,000 in linked accounts to avoid monthly fees.
With this new direction, it seems Bank of America will also be discontinuing their MyAccess Checking Account and Advantage with Tiered Interest Checking Account. No word on which of the new accounts users would be switched to, but our guess is MyAccess customers would switch to the Essentials account and Advantage with Tiered Interest would move to Premium Checking. Which means the $10,000 combined minimum balance to avoid fees is now $20,000.
New rewards program for high net worth customers
Among the changes, Bank of America is also introducing a new Platinum Privileges rewards program that offers special rates on mortgages, CDs and money market accounts when you carry a combined balance of $50,000.
This change comes as banks prepare to loose billions of revenue a year due to new interchange laws, that sets caps on the amount banks can change retailers for debit and credit card swiped transactions.
Though the concept of needing to meet certain requirements to avoid Bank of America fees is nothing new, for some current and future Bank of America customers, not knowing your banking habits could cost you as much as $300 a year.
Changes to additional banking services and fees took effect on January 6, 2011:
Non-Sufficient Fund (Overdraft) $35
Stop Payment item $30
Return Deposit $35
Domestic Wire Transfer (Outbound) $25
Domestic Wire Transfer (Inbound) $12
ATM and Debit Car Fees: Non-BofA ATM $2
How do you feel about these new Bank of America fees? Will you be staying with Bank of America this year or is this change enough to start looking for a new checking account?