Bank of America (BofA) is all set to introduce a new current account, Safe Balance, which will prevent low-income customers from overdrawing funds and overdraft fees.
The move by BofA is to compete against non-banks, which are constantly entering into financial sector, and against increased use of prepaid debit cards.
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With a monthly fee of $4.95, the Safe Balance account will prevent customers from paying more money than in their accounts while using ATM, paying bills online or purchasing at the point of sale (POS). Currently, customers pay $35 as an overdraft fees.
Though the account holders will not be able to write paper cheques, they will have complete access to online and mobile banking and automatic bill pay.
Safe Balance accounts were launched in a pilot programme in Rhode Island, Oregon, Michigan, Virginia, Maryland and Washington DC, with plans to roll out the account throughout the nation soon.
BofA will retain its other traditional current accounts, the interest-free MyAccess and its interest-bearing current accounts.
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