“Keep the Change”: How Bank of America Pioneered Roundup Savings

Friday, August 30, 2019

By John Thompson, Chief Program Officer, Financial Health Network

A main goal of the BlackRock Emergency Savings Initiative is to build and integrate better savings tools to help individuals, especially those with low-to moderate-income, save. My team at the Financial Health Network has done extensive research on the current savings crisis to better understand the realities Americans are facing. We know that 60% of households are unprepared for a financial shock and 45% of Americans say they do not have enough savings to cover at least three months of living expenses. And the recent Federal Reserve SHED data confirms people are struggling to save — 40% of adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money.

The good news is that there are proven innovations to create shortcuts and start people on a path toward savings. Automated savings is one of them. Automated savings allows users to save without having to think about it. By automatically deducting small increments of money from a user’s account and transferring it into a separate account, these products allow users to build a reserve of savings with little effort or discomfort. For many low — to moderate-income individuals who are balancing multiple responsibilities, an automated approach to savings may the key to building and maintaining a financial cushion.

An early adopter of this behavioral innovation was Bank of America. In 2005, it launched “Keep the Change,” a program that rounds up purchases on Bank of America sponsored debit cards to the nearest dollar and transfers the difference to a savings account. Deposits are made on a daily basis to allow users to track their savings through the Online Banking portal at any time to see their progress.

For example, imagine you made the following purchases yesterday on your card “Keep the Change” supported Bank of America card:

Coffee = $2.89

Lunch = $8.95

Groceries = $42.59

Gas = $35.34

The program would round these purchases up to $3, $9, $43 and $36, depositing $1.23 into your savings account.

“Keep the Change” quickly took off. The first year attracted 2 million customers and its popularity has since grown to over 12 million who have saved a total of $2 billion. Moreover, 3 in 5 new Bank of America customers choose to enroll in the program and 99% of those who sign up stay in the program.

What’s behind this success? It’s easy! Few people notice the extra $1.23 leaving their account. The setup of the program allows people to enroll and essentially forget that they’re building savings.

Critics may say that building savings at increments of $1.23 is not a lot, but the small amount adds up over time. Saving at this seemingly small rate, through simple and automatic rounding of everyday purchases, can allow an individual to put away $400 for an emergency in less than a year.

Today, many other organizations and fintechs are using this approach to help people save. The round up approach has been replicated in investing, charitable giving, by fintechs and even by some of the recent college debt apps. Automated savings is just one of many proven innovations that the industry experts from the BlockRock Emergency Savings Initiative industry expert teams will use to help the initiative’s corporate partners test interventions to help their employees build financial security through savings We will be excited to share more data on the interventions and pilots after the program launch this fall. Until then, visit to learn more about the savings problem via research and news updates.

BlackRock’s Emergency Savings Initiative is a three-year commitment to help people living on low- to moderate income gain access to and increase usage of proven savings strategies and tools to help them establish an important safety net. Led by their Social Impact team, BlackRock, along with nonprofit experts known for their innovative approach to consumer finance, Financial Health Network (formerly CFSI), Commonwealth, and Common Cents Lab, are working to address the crisis and fuel the future of savings innovation. This post is content developed in conjunction with the Emergency Savings Initiative project.

By Financial Health Network on August 30, 2019.

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