KeyBank rolls out no-fee overdraft, debit-linked savings accounts
KeyBank in Cleveland has rolled out three new banking products intended to help its customers to build savings and pay down debt.
The $144.5 billion-asset unit of KeyCorp said Monday that it is introducing no-fee overdraft protection, a 2% cash-back credit card and a debit-linked savings program. Key said it hopes to increase customer loyalty by rewarding them for having their primary banking relationships with Key, while also helping them achieve their financial goals.
“These are solutions where every day, every small step adds up,” said Dennis Devine, president of Key’s consumer bank. “The $0 overdraft is simply a reflection that we know from time to time oversights can happen. We want to reward our clients for the relationships they have with us.”
Key has been emphasizing financial wellness more broadly as part of its retail banking strategy. It recently introduced a financial wellness review tool for its branch network, following broad success with HelloWallet, a personal financial management app it bought in 2017. Key has previously designed other products for lower- and middle-income customers, including a small-dollar loan and a “hassle free” checking account that waives fees for customers who don’t write checks.
A number of other banks have introduced similar programs predicated on the idea of building savings a little bit at a time. For example, Bank of America has offered its “keep the change” program for a number of years now. It works by rounding up debit card purchases to the next dollar and moving the extra change into savings. And Fifth Third Bancorp in Cincinnati acquired the fintech Dobot, which moves small amounts of money from a customer’s checking account into savings.
A number of other banks are also rethinking their approach to overdraft fees, sometimes deciding it’s worth sacrificing a little bit of fee income to keep customers happy. Huntington Bancshares in Columbus, Ohio, began offering a 24-hour grace period on overdrafts in 2010. More recently, U.S. Bancorp launched a new mobile app that among other things, will notify customers when they’re close to overdrawing their account.
Key will now waive overdraft fees for customers who enroll in overdraft protection and have enough money in a linked savings account to cover the overdraft.
Devine said that Key concluded from consumer research that customers want to take small, daily steps toward such goals as saving for emergencies and paying off debt.
The new savings program, dubbed EasyUp, works by transferring $1 to a KeyBank savings account for every purchase a customer makes using a KeyBank debit card. Later this year, the bank said it will add an option for customers to automatically send their monthly EasyUp savings to pay down a debt of their choosing.
Key’s new credit card offers 2% cash back on all purchases for customers who have a KeyBank checking account and a savings or investment account with a minimum balance of $1,000. Cardholders who don’t meet those criteria can earn 1.5% cash back, Key said.