Bank of America does not offer a high yield savings account

Bank of America's standard savings account earns interest, but the rate is significantly lower than what you can find at online banks and credit unions. As of now, Bank of America's savings account rate is well below 1% annually, while high yield savings accounts at other institutions pay between 4% and 5% or higher. If you keep money in a Bank of America savings account, you are leaving substantial interest on the table compared to accounts specifically designed to pay competitive rates.

Bank of America does offer a Money Market account, which sometimes pays slightly higher rates than their savings account, but it still does not compete with dedicated high yield products. The difference matters: on $10,000, the gap between 0.01% and 4.5% is roughly $450 per year in lost interest.

Key Takeaways

  • Bank of America savings accounts pay less than 1% interest, making them unsuitable if earning interest is your goal.
  • High yield savings accounts at online banks and credit unions typically pay 4% to 5% or more annually.
  • Bank of America's Money Market account pays slightly more than savings but still falls short of true high yield rates.
  • Moving money to a high yield account elsewhere costs nothing and takes a few days to set up.

Why Bank of America's rates lag behind competitors

Bank of America is a large brick-and-mortar bank with physical branches, staff, and overhead costs. Those expenses are built into their business model, which means they do not need to offer high interest rates to attract deposits. They rely on customers who value convenience, existing relationships, or the ability to walk into a branch.

Online banks and credit unions have lower operating costs because they do not maintain branch networks. They pass those savings to customers through higher interest rates. A customer with $50,000 in a Bank of America savings account earning 0.01% makes $5 per year. The same $50,000 at a high yield savings account earning 4.5% makes $2,250 per year—a difference of $2,245.

What Bank of America savings accounts actually offer

Bank of America's regular savings account comes with FDIC insurance up to $250,000, which protects your money if the bank fails. You can withdraw money without penalty, and you have access through their app, website, and branches. If you need to speak to someone in person, that convenience has value—but it does not come with competitive interest.

The account requires a minimum opening deposit (often $25 or $100, depending on the account type), and there are no monthly maintenance fees if you maintain a minimum balance or set up direct deposit. However, none of these features change the core problem: the interest rate is too low to justify keeping substantial savings there.

High yield savings accounts you can open instead

Online banks like Marcus by Goldman Sachs, Ally Bank, and American Express Personal Savings all offer high yield accounts with rates between 4% and 5.35%, depending on current market conditions. Credit unions often offer competitive rates as well, sometimes higher. These accounts have the same FDIC insurance protection as Bank of America and take three to five business days to fund from your existing bank account.

Opening an account at another bank does not require closing your Bank of America account. You can keep checking there for bill pay and branch access while moving savings to earn real interest elsewhere. Many people maintain accounts at multiple institutions for exactly this reason.

Moving money from Bank of America to a high yield account

The process is straightforward: open an account at your chosen bank, then initiate an external transfer from Bank of America's app or website. You will need the routing number and account number of your new account. Bank of America will send the money via ACH, which typically takes three to five business days. You can also withdraw cash and deposit it, though that is slower and less secure.

There is no fee to transfer money out of Bank of America, and closing a savings account costs nothing. If you have automatic deposits or bill payments tied to the account, update those before you transfer the balance. Once the money arrives at your new bank, you start earning interest immediately at the higher rate.

When Bank of America savings still makes sense

If you need frequent in-person access to your money or prefer managing everything at one bank, Bank of America's convenience may outweigh the interest cost. Some customers value the simplicity of one login and one relationship, even if it costs them money. That is a personal choice, not a financial one.

If you have a very small balance—under $1,000—the annual interest difference is minimal, and convenience might reasonably win. But if you are holding $5,000 or more in savings, the interest gap becomes large enough that moving the money takes less than an hour and saves you hundreds of dollars per year.

Frequently Asked Questions

Can I keep my Bank of America checking account and move only savings to another bank?

Yes. Checking and savings are separate accounts, and you can close one without affecting the other. Many people keep checking at Bank of America for bill pay and branches while moving savings to a high yield account elsewhere.

Will moving money to another bank hurt my credit score?

No. Opening a savings account does not trigger a hard inquiry and does not affect your credit. Transferring money between your own accounts is not reported to credit bureaus.

What if interest rates drop at my new bank?

Banks can lower rates at any time, and high yield rates have fallen from peaks above 5% to current levels around 4% to 4.5%. You can move money again if rates drop significantly, though most online banks still pay more than Bank of America regardless of market conditions.

Is my money safe at an online bank I have never heard of?

If the bank is FDIC insured, your deposits are protected up to $250,000 the same way they are at Bank of America. Check the bank's website for the FDIC insurance statement. Most online banks are FDIC insured.

How long does it take to earn interest on a transfer?

Interest accrues daily on most high yield savings accounts, so you start earning as soon as the money settles in your account—usually three to five business days after you initiate the transfer.