Citizens Bank has introduced Citizens Peace of Mind, a deposit feature that helps underserved communities avoid unexpected overdraft fees.
The feature, which was added to all Citizens checking accounts on October 1, allows customers who unexpectedly overdraw their accounts the ability to deposit or transfer funds to bring their account to a positive balance
Brenda Coughlin, head of consumer banking at Citizens said: “Citizens Peace of Mind™ empowers customers by helping them to avoid unnecessary fees. Life can be hectic, and we believe a bank should operate as a transparent and trusted financial partner, helping customers keep more of their hard-earned money in their pockets.”
The feature will complement the $5 Overdraft Pass, a customer protection that the bank has offered for several years on all checking and money market accounts. If a customer overdraws their account with a transaction of $5 or less, the bank does not charge an overdraft fee.
In the past few months, Citizens Bank has also introduced a student checking account with no overdraft fees, and an automatic once a year overdraft rebate on selected products.
Meanwhile, Zions Bank has achieved a Bank On certification for its no-overdraft-fee deposit account from the Cities for Financial Empowerment Fund.
The OnBudget Banking product will help customers help manage their funds and save money on expensive products offered by financial services firms outside of the banking industry.
The account features a modest monthly service charge and no overdraft fees. It includes a Visa debit card for payments and accessing funds.
The product fills a gap for customers, including unbanked and underbanked individuals who, according to a 2019 FDIC survey say that common reasons for using non-traditional deposit accounts the banking industry include not being able to meet the minimum balance requirement and unpredictable fees.
The 2019 FDIC survey shows that close to 5% of US households, approximately 12 million adults are unbanked without a checking or savings account and almost 11% of US households, approximately 24 million adults are underbanked.
The banking industry has made a collective effort to encourage underbanked individuals into the system. The FDIC recently launched a fund to support underserved communities, while the Bank On Initiative hit a landmark in July as coverage grows. More than 100 banks and credit union account products now meet national account standards according to the initiative.
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