Earlier this month I took a look at Bank of America's saving plan, called Keep the Change, which didn't live up to the hype, due mostly to the abysmally low interest rate that your saved change earned.
One of the commentators shared why they thought Bank of America's plan was worthwhile, including the fact that they thought the match made up for the low interest rate as well as the program being an easy way to save. This comment got me thinking that there had to be a middle ground that provided a good upfront match as well as the potential for growth over time that comes from a good APY.
While watching the news this morning I found out that Wachovia stepped up to the plate with Way2Save, its own automatic savings plan, which seems to meet my criteria for a good savings program.
Way2Save is a program that you can opt into at Wachovia which deposits $1 into a savings account every time you use your debit card or pay a bill electronically. You can also contribute up to an additional $100 to the savings account each month through an automatic transfer.
All of these contributions are not only matched at 5% for the first year but also earn 5% for the first year you have the account open. After the first year you still get a 2% match and a 2% APY on your contributions. While bank of America has a 5% match for a longer period of time, the fact that Wachovia is providing a higher interest rate and more ways to add money to the account makes me vote for Way2Save. By providing a higher interest rate, consumers have more incentive to save money and the ability to contribute your own money to the program will help create a habit of saving with consumers.
Wachovia even provides a calculator, which can show you how much you'll have at the end of year three if you make use of the program. If I contributed $100 a month and used my debit card as I normally do I would have over $5,000 in savings at the end of my third year. Even if I scratch the automatic transfer I'll have saved close to $1,500 from the Way2Save program. As an added bonus, you can even use the high yield savings account for overdraft protection and your transfer to savings will never process if it would put you into overdraft. As far as I can tell, Wachovia's Way2Save is a winner for anyone looking to start saving money automatically.
Wachovia does automatic savings right with Way2Save