Bank of America does not offer a dedicated high yield savings account

Bank of America's standard savings accounts earn interest rates well below what other banks pay. As of now, Bank of America's regular savings account earns around 0.01% annual percentage yield (APY), while some online banks and credit unions offer rates between 4% and 5% APY on high yield savings accounts. The difference matters: on a $10,000 balance, you would earn roughly $1 per year at Bank of America versus $400 to $500 per year at a high yield account elsewhere.

Bank of America does offer a Money Market Account, which pays slightly higher interest than their savings account, but the rate is still significantly lower than high yield options available elsewhere. The bank also offers certificates of deposit (CDs) with fixed rates, though these lock your money away for a set term and may not beat high yield savings rates depending on current market conditions.

Key Takeaways

  • Bank of America's savings accounts pay around 0.01% APY, which is substantially lower than high yield savings accounts offered by online banks and credit unions.
  • Bank of America's Money Market Account pays more than their standard savings account but still lags behind dedicated high yield savings products.
  • If earning interest on your savings is a priority, you may want to compare Bank of America's rates against online banks, which typically offer rates between 4% and 5% APY.
  • Bank of America's strength lies in branch access and customer service, not in savings account interest rates.

Why Bank of America's rates are lower than competitors

Banks like Bank of America maintain physical branch networks, employ thousands of staff, and offer services beyond savings accounts. These costs are built into their business model. Online banks and credit unions have lower overhead because they operate without branches or with far fewer locations, so they can pass savings on to customers through higher interest rates.

Bank of America also relies on customer loyalty and convenience rather than competitive rates to retain deposits. Many customers keep money there because they use the bank's checking account, credit cards, loans, or investment services. The bank does not need to compete aggressively on savings rates to keep that money.

What Bank of America's Money Market Account offers

Bank of America's Money Market Account combines features of savings and checking accounts. You get a debit card, check-writing ability, and tiered interest rates that increase as your balance grows. However, the highest tier still pays significantly less than high yield savings accounts elsewhere.

The Money Market Account requires a minimum opening deposit and has monthly maintenance fees unless you meet certain balance requirements or set up direct deposit. These fees can offset any interest you earn, especially on smaller balances. You should calculate whether the interest earned minus any fees makes this account worthwhile for your situation.

Bank of America CDs as an alternative

Bank of America offers certificates of deposit with terms ranging from a few months to several years. CD rates are fixed for the entire term, which means you know exactly what you will earn. Depending on the term length and current market conditions, Bank of America CDs may occasionally be competitive with or slightly better than their savings account rates.

The trade-off is that your money is locked in. If you withdraw before the term ends, you pay an early withdrawal penalty that can wipe out all interest earned and reduce your principal. Bank of America's CD penalty varies by term length, so check the specific terms before opening one.

When Bank of America savings makes sense despite lower rates

If you already bank with Bank of America and use their checking account, credit cards, or loans, keeping savings there simplifies your finances. You can see all your accounts in one place, transfer money instantly between your own accounts, and access a branch or ATM network if you need cash quickly.

Bank of America also offers FDIC insurance up to $250,000 per account type, which protects your money if the bank fails. Online banks and credit unions have the same protection, so this is not a unique advantage, but it is worth knowing your deposits are safe regardless of where you bank.

How to compare Bank of America against high yield alternatives

Start by listing what matters to you: interest rate, branch access, customer service, minimum balance requirements, and monthly fees. Then compare Bank of America's offerings against at least two online banks and your local credit union. Most online banks publish their rates on their websites and let you open an account entirely online.

Calculate the annual interest you would earn on your typical balance at each institution, then subtract any monthly fees. A high yield account with a $0 monthly fee will almost always beat Bank of America's savings account, even if you only keep a few thousand dollars there. If you value branch access highly, look for online banks that partner with ATM networks or credit unions with shared branching agreements.

Moving money from Bank of America to a high yield account

If you decide to move your savings elsewhere, the process is straightforward. Open an account at your chosen bank or credit union, then use their transfer tool to move money from your Bank of America account. Most transfers take one to three business days. You can keep your Bank of America account open for checking and other services while moving savings to a higher-rate account.

Some people maintain accounts at multiple banks: a checking account at Bank of America for everyday spending and branch access, and a high yield savings account elsewhere for money they want to grow. This approach lets you use each bank's strengths without compromising on interest rates.

Frequently Asked Questions

Does Bank of America have any savings account that earns more than 0.01%?

Bank of America's Money Market Account pays higher interest than their standard savings account, and CD rates vary by term. However, both still pay significantly less than high yield savings accounts at online banks and credit unions. Check Bank of America's current rates on their website to compare specific products.

Can I earn high yield rates if I keep a large balance at Bank of America?

No. Bank of America's interest rates do not increase based on balance size. Even with $100,000 or more, you will earn the same low rate as someone with $1,000. Online banks and credit unions also do not typically raise rates for larger balances; instead, they offer the same competitive rate to all customers.

What happens to my money if I move it to an online bank?

Your money remains insured by the FDIC (or NCUA if you choose a credit union) up to $250,000 per account type, just as it is at Bank of America. Online banks are regulated the same way as traditional banks. The main difference is you cannot walk into a physical branch, but you can manage your account online or by phone.

Should I close my Bank of America account if I open a high yield savings account elsewhere?

Not necessarily. Many people keep a Bank of America checking account for everyday spending and branch access while moving savings to a higher-rate account. You only need to close the account if you no longer want the services Bank of America provides or if you want to consolidate all your banking in one place.

How often do Bank of America's savings rates change?

Bank of America adjusts rates periodically based on market conditions and Federal Reserve decisions, but changes are infrequent and usually small. High yield savings rates at online banks also fluctuate, so if you move your money, expect the rate you open with to change over time. Check your account's rate regularly to stay informed.