Bank of America's High Yield Savings Options

Bank of America does not offer a traditional high yield savings account. The bank's standard savings accounts earn interest rates well below what you can find at online banks and credit unions—typically 0.01% APY or less, depending on your account type and balance. If you are looking for a savings account that compounds money faster, you will need to look elsewhere or use a different product within Bank of America's own lineup.

Bank of America does offer a Money Market Account, which functions like a hybrid between checking and savings. Money Market Accounts at Bank of America currently earn higher rates than their basic savings products, though the rate still lags behind dedicated high yield savings accounts at online banks. The rate varies based on your balance tier and changes with the Federal Reserve's rate environment.

If you already bank with Bank of America and want to keep your money in one place, the Money Market Account is your best option within the bank. If maximizing interest is your primary goal, you will earn more by moving your savings to an online bank, credit union, or money market fund outside Bank of America.

Key Takeaways

  • Bank of America's standard savings accounts earn 0.01% APY or less, which is significantly lower than high yield savings accounts at online banks.
  • Bank of America's Money Market Account earns a higher rate than regular savings but still typically trails online high yield options by 1% to 2% annually.
  • The rate on Bank of America's Money Market Account changes with Federal Reserve decisions and varies by balance tier.
  • Online banks and credit unions currently offer high yield savings rates between 4% and 5% APY, depending on market conditions.

How Bank of America's Money Market Account Works

Bank of America's Money Market Account combines features of both savings and checking. You get a debit card and check-writing privileges, which a traditional savings account does not offer. The tradeoff is that the interest rate is tiered—the more money you keep in the account, the higher your rate. Bank of America publishes these tiers on their website, and they shift when the Federal Reserve changes rates.

Deposits are FDIC insured up to $250,000, the same as any other Bank of America deposit account. You can withdraw money without penalty, though the account is designed for money you want to keep relatively stable rather than move constantly. There is no monthly fee if you maintain a minimum balance, which Bank of America specifies in their account terms.

Why Bank of America's Rates Lag Behind Online Banks

Bank of America operates thousands of physical branches and employs thousands of staff. Those costs get passed to customers through lower interest rates on savings products. Online banks have no branches, no tellers, and minimal overhead—they return that savings to customers in the form of higher rates.

When the Federal Reserve raised rates aggressively between 2022 and 2023, online banks moved their rates up quickly to stay competitive. Bank of America raised rates more slowly and to lower levels. This gap persists: an online bank might offer 4.5% APY on a high yield savings account while Bank of America's Money Market Account earns 1.5% to 2.5%, depending on your balance.

The difference compounds over time. On $10,000 saved for one year, the gap between 0.01% and 4.5% is roughly $450 in lost interest. Over five years, that gap grows substantially.

When Bank of America's Money Market Account Makes Sense

If you use Bank of America for checking and want to keep all your accounts in one place, the Money Market Account is convenient. You can move money between accounts instantly through online banking, and you do not need to manage multiple logins or wait for transfers to clear.

The Money Market Account also makes sense if you need check-writing or debit card access to your savings. A high yield savings account at an online bank typically does not offer either. If you plan to write checks against your savings regularly, Bank of America's option is more practical than opening a separate account elsewhere.

For emergency funds that you want to access quickly and keep at your primary bank, the Money Market Account is reasonable. The rate is not competitive, but the convenience and immediate access may outweigh that for some people.

How to Compare Bank of America to Other Options

Before opening a Money Market Account at Bank of America, check the current rates at online banks. Visit the websites of Ally, Marcus, Wealthfront, or other online banks that advertise high yield savings. Write down their current APY and the minimum balance required. Then compare that to Bank of America's Money Market rate for your expected balance.

Calculate the annual interest difference. If you plan to keep $25,000 in savings, multiply that by the rate difference. If an online bank offers 4.5% and Bank of America offers 1.5%, the difference is 3%. On $25,000, that is $750 per year in interest you would forgo by staying with Bank of America.

Also check whether the online bank has any fees, minimum balance requirements, or restrictions on how often you can withdraw. Most high yield savings accounts have no fees and no minimums, but it is worth confirming. If the online bank charges fees or requires a large minimum, that narrows the advantage.

Moving Money to a High Yield Account Without Closing Bank of America

You do not have to close your Bank of America account to open a high yield savings account elsewhere. You can keep your checking account at Bank of America and open a savings account at an online bank. Link the two accounts through your Bank of America online banking portal, and you can transfer money between them in one to three business days.

Some people keep a small amount in their Bank of America savings for immediate access and move larger amounts to a high yield account at an online bank. This gives you the convenience of Bank of America for daily banking and the higher rate for money you are saving long-term.

When you link accounts at different banks, Bank of America will ask for the routing number and account number of the external account. You provide this information in the "Transfer Funds" or "Link Account" section of online banking. The first transfer may take longer while the banks verify the connection, but subsequent transfers are faster.

Frequently Asked Questions

What is the current interest rate on Bank of America's Money Market Account?

Bank of America's Money Market Account rate changes with Federal Reserve decisions and varies by balance tier. Check Bank of America's website or call your local branch for the current rate on your expected balance. Rates are typically lower than online high yield savings accounts.

Can I withdraw money from a Bank of America Money Market Account anytime?

Yes, you can withdraw money without penalty. The account is designed for savings, but there is no lock-in period or withdrawal limit. You can access funds through the debit card, checks, or online transfer.

Is my money safe in a Bank of America Money Market Account?

Yes, deposits are FDIC insured up to $250,000. This means if Bank of America fails, the federal government guarantees your money up to that limit. This protection applies to all Bank of America deposit accounts, including Money Market Accounts.

Should I move my savings to an online bank if I use Bank of America for checking?

If earning the highest interest rate is your priority, an online bank will pay significantly more. You can keep your checking at Bank of America and open a high yield savings account elsewhere. The two accounts can be linked for easy transfers, so you do not lose convenience.

What happens to my Money Market Account rate if the Federal Reserve lowers rates?

Bank of America will lower your rate when the Federal Reserve cuts rates. The bank typically announces rate changes on their website and notifies account holders by mail or email. Your rate may drop faster than rates at some online banks, so comparing periodically is worth doing.