nm... Keep the Change Thinking Outside the Bank When you think of banks, you probably see an unimaginative, conservative industry. Most banks offer very similar services and interest rates on loans, savings accounts, and certificates of deposit. So how can a bank differentiate itself to attract new customers? "Keep the Change" Bank of America came up with a plan and in 2005 launched a new program called "Keep the Change." The bank tallies each purchase its customers make with their debit cards and rounds it up to the next higher dollar. The bank then transfers the difference, or "change," into the Bank of America savings accounts of customers. To sweeten the pot, the bank matches the first three months of savings at 100 percent and each month thereafter at 5 percent, up to a yearly total of $250. The bank's contributions are made annually, but customers can still watch their money grow with interest on a daily basis. HOW IT WORKS Go into a store, buy a cup of coffee for $1.50 IT ADDS UP! Daily Purchase Amount Transferred Purchases Price to Savings Pay for it with your Keep CD: $9.63 $.37 the Change debit card, B of A rounds it off to $2 Latte: $3.80 $.20 Burger: $2.29 $.71 Total $15.72 $1.28 B of A transfers $.50 from your checking to your savings account, matching 5% of the annual total up to $250 Don't Even Think About Saving How did Bank of America come up with such a new idea in an industry not known for innovation? In early 2004, the bank hired researchers to study people's banking and spending habits. They found that some people rounded up their payments to make balancing their checkbooks easier and quicker. They also saw purchasing behaviors that reinforced the stereotype that Americans are big spenders but not big savers. The "Keep the Change" program takes the responsibility for saving out of customers' hands while it rewards spending. Even so, it's still money in the bank. Instead of tossing change into a jar each night, 2.5 million new Bank of America customers allow the bank to slip their change into an interestbearing savings account. Analyzing the Impact Question 1. Summarizing Why did Bank of America introduce its "Keep the Change" program? 2. Drawing Conclusions How much money would a person save per month and per year if making a weekly purchase of the items in the table