Bank of America changes free-checking rules

This month, Bank of America plans a major overhaul of fees and services on its checking, savings and other consumer accounts, including some changes that could make it harder for some customers to qualify for free checking.

Overall, the new packages will offer recognition and benefits for people who do more banking and investing with BofA.

The bank will offer four account packages - a plain-vanilla "essentials" account, plus those offering enhanced, premium and electronic-only services.

The program starts this month with new customers only in Arizona, Massachusetts and Georgia - three states that account for about 10 percent of its customer base of 57 million households.

The effort aims to help customers choose accounts that are good fits, based on each person's preferences, banking behavior and other factors, bank officials said.

BofA is the No. 3 bank operating in Arizona in terms of deposits - behind Wells Fargo and Chase - with a 20 percent market share.

The three test states offer diversity in terms of geography, customer mix and banking preferences, said Susan Faulkner, a BofA executive focusing on deposits and card products.

During the second half of 2011, the new services will be offered to existing customers in those states. Based on feedback, the bank might "tweak" the new accounts, but a national rollout is planned for later this year through early 2012, she said.

The changes are designed to offer customers more flexibility in how they want to bank and pay for services. In addition to checking, ATM and debit access, the accounts also will be structured around savings, borrowing, payments and investments.

Customers will be able to switch accounts. In fact, Faulkner said BofA will contact customers who appear to have inappropriate accounts, such as an e-banking client who continues to order paper statements.

"We want to make sure they're in the right option that fits their need," Faulkner said.

Bank of America currently offers free checking to customers who use direct deposits of paychecks, Social Security checks and more, or for minimum-balance levels.

Under the new format, some consumers will be able to qualify in more ways. For example, in the "enhanced" account, they would get no-fee checking if they had regular credit-card use, kept $5,000 or more in savings or had at least $2,000 in monthly deposits, not just direct deposits. Otherwise, a $15 monthly fee could result.

Other fees would apply on different accounts and could even vary by state. For the simpler "essentials" account, a $6 monthly minimum would apply in Arizona.

For example, people who maintain $50,000 or more in deposits or investments with Merrill Lynch, a BofA company, could receive benefits such as priority service, accelerated rewards and concierge service on credit cards, higher interest rates on deposits plus priority support and better deals on mortgage loans.

by Russ Wiles The Arizona Republic Jan. 7, 2011 12:00 AM





Bank of America changes free-checking rules