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Bank Of America Checking Account Fees Only A Problem If You Are Poor

You might have heard that Bank of America is testing new checking account fees.

This, of course, is big news because of the enormous PR mess the big bank created last year over its planned, then scrapped $5 monthly debit card fee.

Here’s what you need to know about the new fee tests based on what’s publicly available right now:

  • If you want a Bank of America checking account and you have lots of money, you probably aren’t going to be impacted.
  • Even if you don’t have a lot of money, you can still get free checking if you’re a do-it-yourself type of person.

The Wall Street Journal reported Thursday that the nation’s second largest bank is testing “sweeping changes” to its basic checking accounts:

“Bank of America pilot programs in Arizona, Georgia and Massachusetts now are experimenting with charging $6 to $9 a month for an ‘Essentials’ account. Other account options being tested in those states carry monthly charges of $9, $12, $15 and $25 but give customers opportunities to avoid the payments by maintaining minimum balances, using a credit card or taking a mortgage with Bank of America, according to a memo distributed to employees.”

Bank of America said on its Facebook page the fees would not impact existing customers.

I looked at the checking account options available in the three states mentioned in the Journal piece.

Here’s what’s clear: These new fees aren’t nearly as terrible as the debit card proposal was, but this account structure penalizes account holders who have little income, particularly those who don’t have access to computers.

Here’s what these test accounts look like:

  • eBanking: Checking account is free if you opt for paperless statements and avoid branch banking by making deposits and withdrawals online or via ATM. Online bill pay, mobile banking and a debit card are included in this and all checking accounts. Otherwise, you’ll pay $9 a month in Arizona and $12 a month in Georgia and Massachusetts.
  • Essentials: This account charges a flat fee, but there are no account minimums or restrictions on branch banking. Arizona and Massachusetts residents pay $6 a month, while Georgia residents are charged $9.
  • Enhanced: Checking account is free if you deposit at least $2,000 a month, maintain a daily combined deposit balance of at least $5,000 or use a Bank of America credit card at least once a month. Otherwise, you’ll pay $15 a month.
  • Premium: Checking account is free if you maintain a combined balance of at least $20,000 in your Bank of America and/or Merrill Lynch accounts or you have a mortgage from Bank of America. Otherwise, you’ll pay $25 a month.

The more expensive accounts include a few extra bells and whistles, but the typical checking account features are the same.

When I look at what Bank of America offers now, the “Essentials” account is the only new account. The only people who — given the choice — would pick this account are Bank of America’s poorest customers who don’t have a computer or an email account with which to receive electronic statements.

The other accounts and fees are roughly the same that I can get where I live now.

But here’s the other catch: These test accounts require much larger deposit minimums and account balances to avoid fees.

In my home state of Illinois, the MyAccess Checking Account costs $12 a month unless I make monthly direct deposits of at least $250 or maintain an average balance of $1,500. That’s much less than what the “Enhanced” account requires.

The Journal story says the bank hasn’t made a decision whether to roll these accounts out nationwide. The public’s reaction — as we have seen — will play a role.

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