Bank of America Corp (BAC)

[droneputt]

Your analysis appears accurate. The program is a classic "feel good" marketing campaign that actually saves BAC money compared to a 1% rebate. People like the idea of an easy way to increase their savings and it sounds like a good way to do it to the consumer.

What it really helps is in creating a way for a lazy society to put money away into savings.

If you make 4 purchases a day and use your philosophy of averaging .50 transfered per, then you would be putting about $60 per month away plus the 5% bonus ($3). I don't know what the current interest is on a savings account at BAC, but I am sure it ain't much.

If someone really wanted to consistently get a higher rate of return, there are accounts out there that pay a decent return (4-5%). One could just transfer $100 per month into it. You would be saving more money at a higher rate. The only thing you lose is the one time bonus of $3.

Better yet, Every couple of months buy a few more shares of BAC and you get the divi benefit plus the PPS value.

Don't get me wrong, I do not think it is a bad program, but as your example shows, there area better ways to save. It just takes a little more effort. The best thing to do is to do both. Transfer your own set amount into another account and sign up for either a 1% cash back or "Keep the Change" program. That way you are saving at a decent rate plus you have the added bonus of one of these programs.

The big perk about Keep the Change is that it is money you will not miss, just like all the loose change we lose or toss in a tip jar.

This is off the top of my head so please feel free to correct me if this does not make sense. It would not be the first time I confused someone.

JMO