Bank of America recently introduced a new account called SafeBalance account. For $4.95 a month, this account can prevent you from collecting excessive overdraft fees.

The BofA customer is paying about $60 a year with the SmartBalance account, when they could have the same protection for free. If bankers were more conscious and aware of their finances, they would not require the SafeBalance account. It seems it is time that financial consumers take responsibility for their finances.

The reality is the SafeBalance account is monitoring the account, when all of these fees could be prevented with an old fashioned check register by balancing a checkbook. It appears that most people do not truly understand what overdraft is in the first place. When a checking account is opened at a bank or credit union, the person will be asked by the banking associate if he or she would like to “opt in” or “opt out” of overdraft protection. This is part of a new rule by the Federal Reserve in 2010. This rule required that all banks ask customers to opt in or out and could no longer automatically make the decision for the customer to opt in to overdraft protection.

If individuals opt in, this means that any attempts to use more money than available in their account will be allowed. The account will have a negative balance. For every time the account goes negative, or more negative, the account is charged a fee. At BofA, the overdraft fee is $35.

If one opts out, the attempt of a purchase or withdrawal will simply be denied, but the account may still go negative as a result of pre-authorized bill payments or checks. Even if the customer chooses to opt in for overdraft protection, this can be changed at any time. The SafeBalance account will not allow individuals to overdraw their account.

According to Betty Reiss, a spokesperson from BofA, “The SafeBalance account was designed for a small segment of customers who want added protection against all overdrafts. The big difference between SafeBalance Banking and our traditional checking account is that there are no checks and no overdrafts.”

SafeBalance protects against their customer going into a negative balance through ATM withdrawals, online Bill Pay, and making purchases of sales. These features, however, are possible in more practical ways than paying $4.95 a month.  The smart, responsible and practical thing to do would be to monitor accounts. With the technology  available today, there should be no reason not to monitor an account.

Most people own a smartphone and almost every financial institution has developed a mobile application. When most carry their phones with them 24/7, it is possible to check balances, contact financial institutions, and transfer funds whenever and wherever.

Even if a smartphone is not readily available, a computer or land-line telephone will work just as well. Most financial institutions have online banking or a phone line where people can inquire about a balance and transfer funds at any time.

Although it is true that balancing a checkbook is not taught in schools very often anymore, there is always time to learn. This time will be well spent because it will save the consumers money in the long run.

For now, SafeBalance accounts are offered in a trial run in Rhode Island, Virginia, Michigan, Maryland, Oregon and Washington D.C. It will be available throughout the nation later this year.

My hope is that customers really think this through. Avoiding overdraft fees can be as simple as opting out of overdraft protection, paying bills online instead of with checks, checking a balance, maintaining a record and essentially being financially careful and responsible.

The way I see it, why pay $4.95 per month for something that could be free instead?


Taylor Howe can be contacted at

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