So-so savings programs

Published: October 9, 2008

With the economy in turmoil and prices of so many things going up, everyone is trying to hang onto all the cash they can. Several bank programs promise they can help you save by making automatic deposits every time you use your debit or credit card.

With Bank of America’s Save the Change program every check-card purchase is rounded up and the change moves from your checking account to savings. But Consumer Reports says even though Bank of America will match some of the money you deposit, after the first three months that match goes way down. 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 $1 from your checking to your savings. And Wachovia says it will pay you up to $300 just for saving. Sounds good, but Consumer Reports says 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.

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. You can compare interest rates and fees at Bankrate.com.

Despite the temping 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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