Bank of America Launches New Program to Help with Overdraft Fees
U.S. banks normally take close to $20 billion in overdraft fees out of their customers’ accounts every year. That number has been going down in recent years, but it is still a big problem for those who can least afford to pay these fees. That means lower-income consumers often subsidize the free checking accounts used by others.
Bank of America is one of the biggest collectors of overdraft fees. But it has now debuted a new service that automatically moves customers’ money to avoid overdrafts. The program is called Balance Connect.
Bank of America’s Balance Connect allows consumers to link their checking account with as many as five other Bank of America accounts and transfers available funds when needed. While the program helps you avoid overdraft fees, it comes with a $12 fee of its own. But that’s lower than existing overdraft charges, and lower than the average overdraft fee of $24.
This is the latest step that Bank of America has taken to help clients avoid potential overdraft fees. In n 2014 it unveiled SafeBalance Banking, an account that doesn’t charge any overdraft fees.
Bank of America collected $509 million in overdraft fees in the first six months of 2021. That’s 8.6% lower compared to last year, Bloomberg reports.