KeyBank in Cleveland has created a new checking account that eliminates fees for customers who agree not to write checks and do not expect the bank to cover their overdrafts.
The "hassle-free" account, which Key rolled out Monday, is designed primarily for customers who are comfortable banking online or through mobile devices and may not maintain large balances. It comes with no minimum balance requirements and customers can open accounts with as little as $10, Key, a unit of the $90.8 billion-asset KeyCorp (KEY), said in a news release.
The account, though, comes with tradeoffs. Customers who sign up for it are not allowed to write checks or cannot opt in for overdraft protection.
"Banking customers using the hassle-free account can spend less time navigating account requirements and more time talking with us about their financial goals and how to attain those goals," Dennis Devine, co-president of Key Community Bank and head of consumer and small business, said in a press release. "The hassle-free account is designed to help banking customers feel confident in all their financial decisions."
Bank of America (BAC) also offers a no-fee, no-minimum-balance account, called SafeBalance, that prohibits check writing and does not give customers the option of signing up for overdraft protection. B of A charges $4.95 a month for the account, which is aimed primarily at young consumers who keep low balances.