Bank of America(BAC) Introduce a new service that allows customers to transfer funds to prevent overdrafts, thereby getting rid of overdraft fees, Yahoo Finance reports.
The program is called Balance Connect, and it will allow customers to link their checking accounts with up to five other U.S. bank accounts and transfer funds at a fee of $12. The company also launched SafeBalance Banking in 2014, which does not charge overdraft fees.
Bank of America president Steve Borland said the company wants customers to avoid these costs as much as possible.
Customers with overdraft protection function will need to pay 35 USD if the amount withdrawn exceeds the amount in their account. According to consulting firm Oliver Wyman Inc., these fees generate US$20 billion in revenue for Bank of America each year, because users with overdraft protection account for half of the profitability of mass market checking accounts.
Bank of America collected $509 million in overdraft fees in 2021, a decrease of 8.6% from a year ago.
Erin McCullen, the company’s head of consumer deposit products, said the bank wants to provide everyone with the right solutions so that they can successfully manage their finances.
