Bank of America is on the hunt for prepaid customers with a new style of bank account.

The Charlotte, N.C.-based bank began testing a new account called SafeBalance Banking last week in a few select markets: Rhode Island, Oregon, Michigan, Virginia, Maryland and the District of Columbia.

Bank of America does not currently offer a prepaid card direct to consumers.

The account was described to Bank Innovation by BofA spokesperson Betty Riess in this way:

It’s designed for a small segment of customers who want more predictability in the way they bank and protection against overdrafts.  The key differences between SafeBalance and our more traditional checking accounts include no check writing and no bank overdraft fees. Customers have full access to banking channels – online, banking centers, ATMs and call centers.  It has a flat monthly fee of $4.95.

It is designed, in other words, for customers that might otherwise use a prepaid card. Another similarity to prepaid cards? The $4.95 monthly fee.

GonzoBanker recently questioned the wisdom behind prepaid cards carrying such stiff fees:

Most prepaid cards are so laden with fees that almost no one can understand the benefit. If prepaid usage follows the standard card usage trends, banks are likely going to make $100 of interchange per card per year. Why pick on this product to fee them the equivalent of another $35 to $50 a year in product fees, load fees, etc.? What consumers need is an easy-to-use, low-fee card that they can easily fund from their other accounts. We worry so much about replacing dwindling non-sufficient funds and overdraft protection income that we try to make every new product fill the gap in one fell swoop. Look at prepaid cards as a way to drive loyalty and make life easier for your customers (and not as the Lone Savior of Fee Income), and your prepaid acceptance and usage will skyrocket.

And yet prepaid use is climbing even with the fees the cards carry. Nearly one in four customers has one, according to research from Aite Group. Adoption skews younger, but is equally distributed across income types.  Ron Shevlin, senior analyst with Aite Group, identified four key groups behind the growth in adoption of prepaid cards:

Four types of people drive the prepaid debit card market: 1) People can’t get checking accounts; 2) People who can get checking accounts but don’t want to (the debanked); 3) People with a checking account who use prepaid debit cards as a tool to help them control their spending; and 4) Parents who want to give their kids a payment mechanism.

Aite Group’s research would seem to suggest that Bank of America’s branding this product as a bank account, rather than merely a card, is not likely to make the product more attractive than a bank-branded prepaid card such as Chase Liquid.

But Ron Shevlin told Bank Innovation that he believes that BofA has done its research and has in all likelihood identified a segment of customers that wants an account that cannot be overdrawn but don’t think they want a prepaid card. He also highlighted a potential issue regarding availability of funds, a common issue with prepaid users:

There are some potential issues that will impact the success of this account, though. And it’s NOT the fee. It’s the timing of deposits. If someone with this account deposits a check, and it doesn’t clear fast enough for their liking, they may see purchases declined because of insufficient balances. No one likes that.

Another strike against the SafeBalance account is the assumption that traditional checking accounts must carry overdraft protection. The Consumerist notes that, since the Federal Reserve implemented new rules around overdraft in July 2010, customers are not required to opt into overdraft protection, which is essentially a credit product. Customers are often unaware that overdraft is optional, according to The Consumerist. In other words, a free checking account without overdraft protection — assuming that the customer qualifies for such a product — may be a better idea than SafeBalance Banking.

Bank of America’s Riess told Bank Innovation, “We believe SafeBalance Banking provides more value than a prepaid card because it comes with many of the features and benefits of traditional checking accounts, such as full access to our banking centers, ATMs, online banking, online bill pay, mobile banking and call centers.”

In this sense SafeBalance could present a challenge to mobile-first accounts such as Moven and GoBank, which also do not offer overdraft protection or check-writing — but are lighter on mandatory fees.

Shevlin suggested the account could also be designed to please regulators on the lookout for products beneficial to lower-income consumers.