Wachovia, one of America’s leading banks, has launched its Way2Save, a high-yield, automatic savings tool designed to help Americans save money. Way2Save claims to help people save money automatically, by using their Check Card the way they normally would and offers a competitive interest rate of 5% APR and real incentives for saving money, like a 5% bonus. However, would this really be the way to save for America? The fine print may not suggest so. While the yield per year may look rather promi-sing at 10%, the maximum one can transfer each month is only $100, totaling a yearly saving of $1200. The 5% bonus is actually a first anniversary special that drops to 2% in year 2 and 3. The other part of the account that has created more confusion is the $1 transfer to savings with every debit card purchase, automated debit, and online bill pay. Though many have assumed Wachovia is paying a $1 bonus on each transaction, the $1 is simply a transfer from the user’s checking account to his savings account. Wachovia will apply the 5% bonus to those $1 transfers, but that’s only $0.05 per debit, or $1/month pre-tax for an active electronic banking user making 20 transactions per month. So will the end result be saving? Something to think about, and while you’re at it, read more.
Filed under: Finance, Innovation, Strategy
