Bank of America savings account interest rates are low and change without notice
Bank of America's savings accounts earn interest, but the rate is typically well below what you can find at online banks or credit unions. As of early 2024, Bank of America's regular savings account pays around 0.01% annual percentage yield (APY), meaning $10,000 in the account earns roughly $1 per year. Their Money Market account pays slightly more—usually between 0.04% and 0.05% APY depending on your balance—but still far below the 4% to 5% rates available elsewhere.
The rate Bank of America offers you depends on the account type, your balance tier, and current market conditions. The bank can change rates at any time without advance notice, so a rate that was true last month may not be true today. If you keep money in a Bank of America savings account primarily for the interest, you are losing money compared to other options.
Key Takeaways
- Bank of America savings accounts typically earn 0.01% APY on regular savings and 0.04% to 0.05% APY on Money Market accounts, which is significantly lower than online banks.
- The exact rate depends on your account type and balance, and the bank can change rates without telling you in advance.
- A $10,000 balance in a regular Bank of America savings account earns approximately $1 per year in interest.
- If you want higher interest, you will need to move money to an online savings account, money market account, or certificate of deposit (CD) at a different institution.
How Bank of America calculates interest on your savings
Bank of America compounds interest daily and deposits it monthly. That means the bank calculates what you owe based on your balance each day, then adds all those daily amounts together at the end of the month and deposits the total into your account. The more money you have and the longer it sits there, the more interest accrues—but at Bank of America's rates, the difference is minimal.
The formula is straightforward: your balance multiplied by the APY, divided by 365 days. So on a $10,000 balance at 0.01% APY, you earn roughly $1 per year. On $100,000 at the same rate, you earn $10 per year. The rate does not change based on how much money you deposit or how long you keep it there—it is the same for all regular savings customers at that moment.
Why Bank of America rates are lower than competitors
Bank of America is a large brick-and-mortar bank with thousands of branches and ATMs. Maintaining physical locations, staff, and customer service costs money. Online-only banks like Marcus, Ally, and American Express have no branches, lower overhead, and pass those savings to customers in the form of higher interest rates. That is why an online savings account often pays 4% to 5% APY while Bank of America pays 0.01%.
Bank of America also makes money by lending out the deposits you make. They pay you a tiny fraction of what they earn on loans, credit cards, and mortgages. Customers who stay with Bank of America for checking, credit cards, or loans may accept lower savings rates in exchange for convenience or rewards on those products. If you are only using Bank of America for savings, you are subsidizing their other customers.
Money Market accounts and tiered rates at Bank of America
Bank of America offers a Money Market account that pays more interest than regular savings, but the difference is small. The Money Market account typically pays between 0.04% and 0.05% APY, depending on your balance. Some tiers may offer slightly higher rates if you maintain a very large balance, but Bank of America does not publish exact tier thresholds—you have to ask a representative or log into your account to see what rate applies to you.
Even at 0.05% APY, a $10,000 balance earns only $5 per year. The Money Market account also usually requires a higher minimum balance to open (often $2,500) and may charge a monthly fee if your balance falls below that minimum. Check the current terms on Bank of America's website or ask in a branch, because these details change.
Certificates of Deposit (CDs) at Bank of America
Bank of America offers CDs with terms ranging from 3 months to 5 years. CD rates are higher than savings account rates because you agree to lock your money away for a set period. As of early 2024, Bank of America CDs typically pay between 4% and 5% APY depending on the term length, which is competitive with online banks. However, if you withdraw the money before the term ends, you pay an early withdrawal penalty that can wipe out all the interest you earned.
A 5-year CD at Bank of America might pay around 4.5% APY, but a 3-month CD might pay only 4%. Shorter terms pay less because the bank has less certainty about future interest rates. Compare Bank of America's CD rates to online banks before you commit, because rates vary week to week and institution to institution. If you do not need the money for a specific period, a CD can be worth considering—but only if the rate is competitive at the moment you open it.
What to do if you want higher interest on your savings
Move your money to an online savings account or credit union. Online banks like Marcus, Ally, American Express, and Discover currently pay 4% to 5% APY on savings accounts with no minimum balance and no monthly fees. Credit unions often pay competitive rates as well, especially if you are a member. The process takes a few days: open an account at the new institution, provide your Bank of America account number, and authorize a transfer. Your money moves electronically, and you keep earning interest the whole time.
If you want to keep some money at Bank of America for convenience—for example, because you use their checking account or have a mortgage with them—that is reasonable. But do not keep large savings balances there expecting to earn meaningful interest. Put your emergency fund or other savings in a higher-rate account and transfer money back to Bank of America only when you need to spend it.
Another option is a high-yield Money Market fund through a brokerage, which can pay 5% or more, though the rate fluctuates and you take on slightly more risk than with a bank savings account. These are not insured by the Federal Deposit Insurance Corporation (FDIC) the way bank accounts are, so understand the trade-off before you move money.
How to check your current Bank of America savings rate
Log into your Bank of America online account or mobile app and go to the account details page for your savings account. The APY should be listed there. You can also call Bank of America at 1-800-432-1000 or visit a branch and ask a representative. The rate shown is the rate you are currently earning, but it can change at any time. Bank of America will notify you by mail or email if the rate changes, but the notification often arrives after the change takes effect.
If you want to track rates over time, write down the APY when you check it and check again in a month or two. You will quickly see whether Bank of America is raising or lowering rates. If rates are falling, that is a sign to move money elsewhere before rates drop further. If rates are rising, Bank of America will eventually follow, but they usually lag behind online banks by several weeks.
Frequently Asked Questions
Does Bank of America charge a monthly fee on savings accounts?
Bank of America does not charge a monthly maintenance fee on regular savings accounts, but some Money Market accounts charge a fee if your balance falls below the minimum. Check your account terms or ask a representative about fees on your specific account type.
Can I earn more interest by keeping a larger balance at Bank of America?
Not significantly. Bank of America does not offer much higher rates for larger balances in regular savings accounts. Money Market accounts may have tiered rates, but the difference between tiers is usually less than 0.01%. You will earn far more interest by moving the same balance to an online bank.
What happens to my interest if I withdraw money before the end of the month?
Bank of America calculates interest daily based on your balance each day, so if you withdraw money mid-month, you earn interest only on the balance you held. You do not lose interest you already earned, but you earn less for the days after the withdrawal.
Is my savings account insured if Bank of America fails?
Yes. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per account type at each bank. Your Bank of America savings account is covered up to $250,000, and a Money Market account is covered separately up to $250,000. This protection applies whether you earn 0.01% or 5% interest.
How often does Bank of America change savings rates?
Bank of America can change rates at any time without advance notice. Changes usually happen when the Federal Reserve changes interest rates, but the bank may also adjust independently. Check your account periodically or set a reminder to compare rates every few months.