You might've seen the Bank of America commercials for their "Keep the Change" promotion. You know, that annoying commercial where the happy shiney people hand over their debit card to pay for purchases, and then do this rather sensual, clandestine little touching-of-fingers move. I have the feeling Bank of America purposefully uses the cutsey handplay motion to distract viewers into thinking this "Keep the Change" promotion is a better deal than it is in reality.

Face it; any sort of bank deals always have some sort of catch. The bank isn't out to give you a bunch of free money, as the "keep the change" advertising may lead you to believe. Instead, the bank is simply trying to pocket more of your money. Think about it. The way the promotion works is, if your total purchase is $3.58, the bank will round up and debit $4.00 from your checkings, then automatically deposit the 0.42 cents in change into your savings account. Essentially, instead of having the loose coins rattling in your pockets, they go straight into the bank.

As my mom pointed out, psychologically, this concept works really well for some. Some people don't keep track of all their loose coins (re: dropped coins), so it is a better deal to have the bank keep track of those pennies and dimes. For those who would otherwise might have lost those coins, it would impress them to watch their savings balance "grow."

Note that Bank of America regular savings account earns a pithy interest rate of 0.20%, which is pretty much equivalent to keeping the coins in your pocket. However, at the end of the year, you'll earn 5% interest on the cumulative change- NOT on your total balance, say, if you originally had $500 deposited into your account. Still, considering how much ends up going into the ol' coin jar at home, then it might be nice to earn that extra 5% interest...provided you can keep your hands out of that savings account during the year.

One very attractive prospect that might push you to enroll is, during the first three months, Bank of America is price-matching your change. Now, this is an actual "free money" offer (not 100% free since it will be reported as 1099-INT) that might be worth taking advantage. If you were sly enough to purchase an item for $1.01, then Bank of America would be forced to price-match and add in 0.99 to your savings. That's almost like getting your full cashback. Purchase something for $2.02, get 0.98 from the bank, which means you ended up spending $1.04, or ~50% off the original price. Spend $10.05, get 0.95 from the bank, bringing the original price down to $9.10....you get the idea.

In conclusion, "Keep the Change" is more a way to reallocate money than an actual money-making scheme. Instead of taking change out of your pocket and then having it spent or scattered to the winds, it goes automatically back into the bank. The alleged "savings" is really your own money, just being held in the relative safety of the bank instead of lying in the car cupholder. But if you are good about keeping track of loose change then those coins might be better off in your pocket. And if you are a "cash only" person in the first place, then "Keep the Change" is definitely not for you since it involves debit/credit card usage.