Bank of America has discontinued free checking accounts for customers who maintain low balances, moving them to fee-based accounts unless they meet specific deposit or balance requirements. The change has sparked backlash, particularly among lower-income customers who rely on free checking options.
What’s Changing?
- The bank eliminated its eBanking checking account, which previously allowed customers to avoid fees if they used online banking and opted out of paper statements.
- Affected customers are now being placed in Advantage SafeBalance accounts, which carry a $12 monthly fee unless they:
- Maintain a direct deposit of at least $250 per month
- Are enrolled as students under 24 years old
Why Bank of America Made the Change
- Revenue Adjustments – With increasing regulatory pressure on banking fees, banks are looking for alternative ways to maintain revenue.
- Push for Digital Banking – The shift encourages customers to use digital services rather than traditional in-branch banking.
- Industry-Wide Trend – Many banks have been scaling back free checking options, citing operational costs and changing customer habits.
Customer Reactions & Backlash
- Criticism from Low-Income Customers – Many feel the change disproportionately impacts those who can’t maintain high balances or regular direct deposits.
- Petitions & Public Outcry – Consumer advocacy groups have pushed back, arguing that basic banking services should remain accessible.
- Increased Competition from Online Banks – Digital-only banks and credit unions continue to offer fee-free checking, attracting frustrated customers away from traditional banks.
Alternatives for Customers
- Switching to Online Banks & Credit Unions – Many digital banks offer free checking accounts with no balance requirements.
- Meeting Direct Deposit Minimums – Setting up direct deposits of at least $250 per month can waive the monthly fee.
- Exploring Community Banks – Local banks often provide lower-cost banking options with fewer fees.
Conclusion
Bank of America’s decision to phase out free checking for low-balance customers is part of a broader shift in the banking industry toward fee-based services. While the bank justifies the move as part of its digital strategy, many customers are looking elsewhere for truly free checking options. As financial institutions adapt to changing regulations and consumer preferences, the competition for affordable banking services is expected to grow.
