Is the New Bank of America Account as Good as It Seems?

The new SafeBalance account, which costs $5 per month, won’t let you overdraw your account.

The new Bank of America SafeBalance checking account is designed to prevent customers from overdrawing their funds and racking up expensive overdraft fees.

But it comes with a price.

Customers will have to pay a flat $4.95 fee each month for the service, and they won’t be able to write checks, says CNN Money. (We first discussed this new account here.)

It sounds like this could be a great service for chronic overdrafters or customers with low balances in their checking accounts. Sixty dollars a year in bank fees is definitely better than the alternative. Overdraft fees cost customers on average about $225 a year, CNN Money says.

But The Huffington Post argues that the service already exists, and it’s free.

In 2010, the Federal Reserve “said that banks could no longer automatically charge customers huge fees for overdrawing an account balance on everyday purchases,” HuffPo explains.

The new rule said consumers have to opt in if they want so-called overdraft protection, which charges a hefty $35 or so fee every time you pay with an overdrawn account. If you don’t opt in, your debit card will simply be declined if your account doesn’t have enough money.

However, that rule doesn’t apply to paper checks or automatic bill payment plans. The Huffington Post says:

The customers signing up for this account won’t be getting paper checks, and poorer customers are less likely to have a bunch of automatic bill payments anyway. And you can avoid overdraft fees on such transactions, free of charge, simply by not having checks and not having bill payments automatically withdrawn.

Consumerist warns consumers with low checking account balances to steer clear of the new BofA account:

So if you are someone whose bank balance tends to hover close to the overdraft line and don’t want to incur fees, don’t go signing up for some ridiculous, fee-laden card from the nation’s second-largest bank.

Take your money to another bank or a credit union that has truly free checking and make sure you do not opt in to overdraft protection. Be careful of sketchy attempts to upsell or auto-enroll you into overdraft protection, and don’t let the bank talk you into the protection.

Bank of America’s SafeBalance accounts are available in a pilot program in Rhode Island, Oregon, Michigan, Virginia, Maryland and Washington, D.C.

What do you think about Bank of America’s new checking account? Share your comments below or on our Facebook page.

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  • Robert

    Protecting oneself from overzealous banking fees has been around since 2010.
    Existing accounts. If you do not opt in (agree), beginning August 15, 2010, your bank’s standard overdraft practices won’t apply to your everyday debit card and ATM transactions. These transactions typically will be declined when you don’t have enough money in your account, but you will not be charged overdraft fees.
    you must opt out and normally this information is the unmentioned banking info the consumer really needs but, is not covered under a full disclosure rule.
    Bank of America has offered free, ATM and internet only, banking for some time now. So, $4.95/mth for, what was that extra service?
    As most banks explain it, those overdraft fees are so you won’t be embarrassed at the check out counter. I say teach me humility!

  • Jason

    No, it is not a good deal. Any bank that charges fees to have an account is a ripoff. Skip the banks and find a local credit union; they will be happy to have a new customer instead of charging for the privilege of banking.

  • Charles Pantino

    Bank of America, Fernandina Beach, FL 32034. The best thing about it is no longer doing business there.

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