TD Bank will roll out an overdraft fee-free checking account known as TD Essential Banking to expand its product offerings. The low-cost no-overdraft fee account will carry a monthly fee of only $4.95, which can be waived for account owners age 13 to 17.
TD made efforts to meet the requirements of the underbanked or unbanked customers who have almost no access to the banking facilities. It is a low-cost, checkless deposit account designed to provide customers additional account options. Customers won’t be allowed to overdraw their accounts.
TD Bank survey showed 37% of unbanked customers avoid fees
A recent TD Bank survey revealed that more than one-third of 37% of unbanked customers cite fee avoidance and lack of funds as the top reasons why they are discouraged from opening a bank account.
Alissa Van Volcom, head of consumer deposits, products, and payments at TD Bank said, "We foster a culture of care and inclusion among our colleagues and within our communities, and that extends to the products and services that we offer to our customers". "TD's goal for this new account offering is to help our customers establish a more secure, inclusive, and sustainable financial future for themselves, their families, and their communities."
The bank claims that the new account will meet standards laid out by the Cities for Financial Empowerment Fund. TD Bank is changing its overdraft policy. It is now increasing the overdraft approach so that customers won’t be charged until they are at least $10 overdrawn instead of the $5 amount.
TD Bank plans to launch a no overdraft fee account in August
The bank reduced the number of times a customer can be charged an overdraft fee from five per day to three times. The changes will take effect in August and will apply to all the deposit account holders.
Along with TD Bank, some other banks have also made efforts to give more options to customers so that they can avoid the fees that typically range from $25 to $35 every time an account is overdrawn.
PNC rolled out a new checking account similar to TD’s new product in March and it costs $5 per month and no charge to account holders for overdrafts or insufficient funds. Ally Bank no longer charges its customers’ overdraft fees giving relief to the customers.
Other banks such as Frost Bank and Huntington Bank have also introduced features ranging from overdraft grace to an emergency line of credit to customer alerts.
TD Bank has also made changes across the bank's consumer lending portfolio, including a reduced secured card minimum requirement, a fully online-accessible secured card offering, a reduced minimum for home equity loans, and enhancements to Right Step, TD's lenders' mortgage insurance (LMI) product. These changes help provide underserved communities with mainstream financial services and products.