I tend to ignore most promotions that banks send my way. I use Bank of America for my primary checking account, and they often interrupt my online banking log-in to try to sell me on some kind of promotion, and it’s usually crap.

So it was with Keep the Change – I just assumed that it was another little gimmick that wasn’t worth a second glance, and I would sigh heavily whenever the advertisement prevented me from immediately seeing my account balance when I logged into my online checking account. It wasn’t until a friend told me that she was participating that I started to pay attention.

(Now, to show you just how out of it I am, Keep the Change launched in October 2005, and I’m blogging about it in January 2007. The fact that I know what a "blog" is should probably be surprising. Aren't you glad that I get paid fractions of pennies per day to give you financial advice?)

Keep the Change works like an electronic version of a change jar, but a change jar that doubles the amount that you throw in there. You know how you hear that when you pay cash for something, if you ALWAYS put your leftover change in a jar, at the end of a year, you’ll have several hundred dollars saved up? That’s true if you are the cash-paying type – I’m not, although that may change over time. I tend to use my debit card for everything. And this is where Keep the Change comes in.

Keep the Change pretty much works like a change jar. Every time you pay for something with your B of A debit card, Bank of America will round the total up to the next dollar (no matter what the amount) and deposit the difference in your savings account. So, if your morning latte comes to $3.13, an extra $0.87 is taken from your checking and deposited into your savings account.

So, initially, they take extra money out of your checking account and deposit it into savings. This isn’t really revolutionary, but it’s not a bad idea. What makes it a GOOD idea is that, for the first 90 days, Bank of America will 100% MATCH those rounded-up cents. After that, they’ll match 5% of what is transferred into your savings.

That’s free money. If you’re already a Bank of America customer, and you’re like me, and you tend to ignore most promotional offers because you don't trust your bank, and you're not enrolled, then you should consider it.

From the Bank of America website:

Earn a promotional match up to $250 per anniversary period for each checking account with the Keep the Change savings service. You will not receive the matching funds for: a) credits or other adjustments related to POS purchases, such as those for purchases that are cancelled or returned; b) purchases of cash-like items, such as money orders, traveler’s checks, foreign currency, cashier’s checks, gaming chips, and other similar instruments and things of value; c) Account funding transactions including transfers to open or fund deposit, escrow, or brokerage accounts and purchases of stored value cards. We may terminate the matching promotion at any time without notice.

Pros

• It makes balancing your checkbook a lot easier. Whole numbers = simple accounting.
• You save money automatically, without thinking about it.
• Did I mention that they MATCH the savings earned through the program?
• Earn as much as you can by tipping – when I go out to eat (every night), I add my tip so that my total comes to exactly one cent over a whole dollar amount - $29.01, for example. That way, Bank of America has to give me $0.99, when the time comes.
• It appears as though you can go ahead and transfer the money out of savings (although this sort of defeats the purpose of saving the money, and you won’t earn as much interest as if you left it there, but in a pinch, you can grab those funds).
• You can buy stuff and return it, and still keep the change. There are some restrictions. See the bottom of this page.

Cons

• There are some catches – if you overdraw your account for a day, you won’t get matched for that day. Only Bank of America checkcards count, so you won’t get it with a regular co-branded Visa.
• You have to report the promotional matching funds to the IRS (form 1099).
• They don’t start matching right away. In fact, it might be hard to determine exactly when they start matching. According to the CSR that I spoke to, they will match your funds at the end of your anniversary year – that is, on the anniversary of the day that you opened your account. The matching is fuzzy. I’ve talked to two Customer Service Reps who claim that there is no limit to the amount of money that Bank of America will match. However, on this page, it seems like there is a $250 matching limit.
• I don’t think it’s really worth it to open a checking and savings account with Bank of America if you don’t already have one. You don’t get great interest rates on savings, and other banks are more than happy to give you better promotional deals.
• You only make a good deal of money on this if you spend like I do, on tons of little items, many times a day. I do this, but I’m trying hard not to, and trying not to makes it difficult to earn as much money from Bank of America. The other thing that bugs me is the knowledge that banks don’t usually lose money on promotions – there’s a reason why they can afford to give you some free money, and that’s because you give them free money all the time.

I've been enrolled in Keep the Change for a little over a month, and I've set aside a little over $70. Which means that Bank of America eventually has to give me $70, at least. Hey, it's not a lot, but it's a manicure and pedicure, right there.

I should add that if anyone has gotten screwed over by this promotion, please do let me know. I'd love to have something to scream about.