Bank of America savings accounts offer low interest rates and monthly fees, making them less competitive than online banks for saving money

Bank of America's savings products come in three main versions: the Regular Savings Account, the Advantage Savings Account, and the Premium Savings Account. The Regular Savings Account charges a $5 monthly maintenance fee unless you maintain a $300 minimum balance. The Advantage version costs $6 per month (waived at $2,500 minimum), and the Premium version costs $25 per month (waived at $100,000 minimum). None of these accounts pay interest rates that compete with online banks—as of early 2024, Bank of America's rates typically sit between 0.01% and 0.04% APY depending on the account tier, while online savings accounts regularly offer 4% to 5% APY on the same deposit amounts.

The real cost of a Bank of America savings account is opportunity cost. If you keep $10,000 in a Bank of America Regular Savings Account earning 0.01% APY, you earn about $1 per year. The same $10,000 in an online savings account earning 4.5% APY earns $450 per year. Over five years, that difference compounds to roughly $2,250 in lost interest—money that stays in the bank's pocket instead of yours.

Key Takeaways

  • Bank of America savings accounts charge monthly maintenance fees ($5 to $25) unless you meet minimum balance requirements that range from $300 to $100,000.
  • Interest rates on Bank of America savings accounts are significantly lower than online banks, typically 0.01% to 0.04% APY compared to 4% to 5% offered elsewhere.
  • The fee waiver thresholds are high enough that most savers either pay the monthly fee or tie up money that could earn more elsewhere.
  • Bank of America savings accounts make sense only if you need a physical branch for deposits, have other accounts that bundle fee waivers, or prioritize branch access over interest earnings.

When the monthly fee actually gets waived

The fee waiver rules matter because they determine whether you pay $60 to $300 per year just to keep the account open. For the Regular Savings Account, you need a $300 minimum balance at all times—not an average, but the actual balance on the day the fee posts (usually the last business day of the month). For the Advantage Savings Account, the minimum is $2,500. For the Premium Savings Account, it is $100,000.

Bank of America also waives fees if you maintain a linked checking account with certain balances or direct deposits. If you have a Preferred Rewards membership (which requires a combined balance of $20,000 across all your Bank of America accounts), some fees are waived automatically. But this creates a trap: you are now keeping $20,000 or more in Bank of America accounts just to avoid paying fees on a savings account that barely pays interest. That money could be earning 4% to 5% elsewhere.

How Bank of America's interest rates compare to other banks

Bank of America's savings rates have not kept pace with the broader market. When the Federal Reserve raised interest rates between 2022 and 2023, online banks and credit unions passed those increases to savers almost immediately. Bank of America did not. A Bank of America Regular Savings Account earning 0.01% APY is paying roughly 1/400th of what an online bank pays on the same deposit.

The gap widens with larger balances. If you have $50,000 to save, Bank of America's 0.04% APY (on the Premium account) generates $20 per year. An online savings account at 4.5% APY generates $2,250 per year on the same money. Even after paying the $25 monthly fee on the Premium account ($300 per year), you still come out $1,930 ahead by moving to an online bank.

Credit unions often offer better rates than Bank of America while charging no monthly fees. Some credit unions pay 0.5% to 1% APY on savings accounts with no minimum balance and no maintenance fee. The tradeoff is that credit unions have fewer branches and less convenient ATM networks, but for pure savings—money you are not touching regularly—the rate difference matters far more than branch access.

What you actually get for the fees you pay

Bank of America's savings accounts include FDIC insurance up to $250,000 (the same protection you get at any bank), online access, mobile app functionality, and the ability to link transfers to a checking account. You can set up automatic transfers to move money into savings on a schedule. You get a debit card for the savings account at some branches, though this is less common now.

The main advantage Bank of America offers is branch access. If you live in an area with many Bank of America branches and you regularly deposit cash or need to speak with someone in person, that convenience has some value. But convenience does not generate interest. A $5 monthly fee to access a branch is a real cost, and it compounds over time.

Who should actually use Bank of America for savings

Bank of America savings accounts make sense in a narrow set of circumstances. If you have a Bank of America checking account and you want to keep your banking in one place for simplicity, and if you can meet the $300 minimum balance on the Regular Savings Account without strain, the $60 annual fee might be acceptable as a cost of convenience. You are paying for the ability to move money between accounts instantly and manage everything through one app.

If you have a Preferred Rewards membership through Bank of America (usually because you have substantial assets there), the fee waiver might already apply, and the cost to you is zero. In that case, the account is free, though the interest rate is still low.

If you need to deposit cash regularly and you do not have access to an online bank's deposit methods (some online banks partner with retailers like Walmart or CVS for cash deposits, but not all), a Bank of America branch might be necessary. The fee then becomes a cost of that service, not a cost of saving.

Outside these scenarios, an online bank or credit union will serve you better. The interest rate difference alone—$200 to $400 per year on a modest $10,000 balance—outweighs any convenience Bank of America provides.

How to move money out if you decide to switch

If you have a Bank of America savings account and you want to move your balance to an online bank or credit union, the process takes three to five business days. You can initiate an external transfer through your new bank's website (they will ask for your Bank of America account and routing number), or you can withdraw the money and deposit it yourself. Bank of America does not charge a fee to close a savings account or transfer money out.

Before you close the account, check whether you have any pending transactions or automatic transfers linked to it. If you set up automatic savings transfers from a checking account, you will need to update or cancel those before closing. Bank of America will send you a final statement showing the account balance and any interest earned (usually a few cents).

Frequently Asked Questions

Can I avoid the monthly fee by keeping $300 in the account?

Yes, but only if you maintain exactly $300 or more at all times. The balance is checked on the last business day of the month. If your balance drops below $300 even once, the fee posts. For most people, this means the account is not truly free—you are locking up $300 that could earn interest elsewhere.

Does Bank of America ever raise its savings rates?

Bank of America has raised rates in the past, but slowly and only after other banks have already moved. When the Federal Reserve raised rates in 2022 and 2023, Bank of America lagged by months. If rates fall in the future, Bank of America will likely cut its rates faster than it raised them. You are always behind the market.

What happens if my balance drops below the minimum?

The monthly maintenance fee posts to your account. If your balance is too low to cover the fee, your account can go negative. Bank of America may charge an overdraft fee on top of the maintenance fee. You should set up a low-balance alert in the app to avoid this.

Is my money safe in a Bank of America savings account?

Yes. Bank of America is FDIC-insured, meaning your deposits up to $250,000 are protected by the federal government if the bank fails. This protection is the same at every bank, so safety is not a reason to choose Bank of America over an online bank.

Can I earn better interest if I open a different type of Bank of America account?

Bank of America's money market accounts and CDs pay slightly higher rates than savings accounts, but still lag behind online options. A Bank of America money market account might pay 0.05% to 0.10% APY, while online money market accounts pay 4% to 5%. The difference is still substantial.