"Every check-card purchase is rounded up and the change slides from your checking to savings." This TV commercial from Bank of America promises an easy way to save.
Not so fast, says Consumer Reports' Greg Daugherty, who checked out bank saving programs, including Bank of America's.
"Even though Bank of America will match some of the money you deposit, after the first three months that match goes way down," said Daugherty. "And the account pays much less interest than you can get at many other banks."
What about the heavily advertised program from Wachovia Bank? Every time you use your debit card or pay a bill online, it transfers one dollar from your checking to your savings: "Plus Wachovia will pay you up to $300 just for saving."
"Sounds good, but to get that full $300 bonus, you'd have to pay bills online or use your debit card 4,800 times in the first year," said Daugherty.
Instead of wearing out your debit card, Consumer Reports says there are much better ways to save.
Use direct deposit and put part of your paycheck into a high-yield online savings account that charges no fees and is linked to a free, interest-bearing checking account.
Despite the tempting ads, Consumer Reports says that will save you more money in the long run.
Consumer Reports says many employers allow you to deposit your paycheck directly into more than one account to help you keep your savings on track. For example, you could have your savings divided between a savings account and an IRA or a college-savings plan.
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