The sweet, sweet feeling of payday was soured for some Bank of America customers, after the company announced plans to completely shutter its free eBanking service earlier this week.
The change, which was first initiated in 2015, requires account holders to maintain a minimum daily balance of $1,500 or have a monthly direct deposit of $250 or more. Those who don't meet these requirements will be charged a $12 monthly fee.
That might not sound like a lot, but as NPR Morning Edition cohost Steve Inskeep broke it down on Twitter, the difference is a costly one for people with less economic wiggle room.
Last year, NACHA, The Electronic Payments Association, found that 82% of U.S. workers are enrolled in direct deposit, up from 79% in 2011. "The 18% of employed U.S. consumers who are not paid by Direct Deposit via ACH can be readily identified within three key population segments," they added. "Younger Generation Y (Gen Y.1 who are ages 18 to 24), lower-income workers (with household income under $50,000 per year), and part-time workers."
Previous research from the organization shows that includes maintenance and repair workers, those in food service and retail, construction and transportation workers, and those in personal care services (hair, nail, spa). Maintaining a $1,500 balance or receiving direct deposit might be fine for many traditional workers, but this isn't easy for those who are paid low wages or rely on tips. A Change.org petition asking Bank of America to repeal the decision has garnered more than 77,250 signatures.
If you're looking for low- or no-fee options in lieu of BoA, online banks (which sidestep brick-and-mortar costs) often have low fees. NerdWallet released a 2018 list of the best free checking accounts, which includes traditional lenders such as Discover and CapitalOne, startups like Chime, online banks like Simple, and credit unions. The latter may be an worth looking into in particular.
"Credit unions are not-for-profit financial cooperatives, which means they can charge lower fees and provide higher rates on savings accounts than for-profit banks such as Bank of America," explains Mike Mattone, the vice president of public relations at Municipal Credit Union. "Many credit unions provide members with accounts that have no fees or lower fees than the big banks. For example, MCU offers a FasTrack Checking account that has no minimum balance requirement or monthly service charge."
The drawback is that you usually do have to meet certain criteria in order to sign up. He adds that credit unions are locally-focused and serve specific communities or employer groups, such as state and federal government employees living or working in NYC, those working in healthcare or education, or students at regional institutions.
"My recommendation to any customer who wants to look for a more cost-effective option for their banking needs would be to visit A Smarter Choice to find the right credit union in their area that is right for them."