Bank of America savings accounts work well if you already bank there, but they may not be the best choice for building serious savings
Bank of America offers three main savings products: a regular savings account, a money market account, and certificates of deposit (CDs). The regular savings account has no minimum balance requirement and no monthly fee, which makes it easy to open. However, the interest rate is very low—typically 0.01% APY or less, meaning $10,000 sitting in the account earns about $1 per year. If you want your savings to actually grow, you will find much higher rates elsewhere.
The real question is not whether Bank of America is good at savings—it is not—but whether the convenience of keeping everything in one place outweighs the cost of earning almost nothing on your money. For most people, it does not.
Key Takeaways
- Bank of America savings accounts charge no monthly fee and have no minimum balance, but the interest rate is so low that your money barely grows.
- Online banks and credit unions typically pay 4% to 5% APY on savings accounts, meaning the same $10,000 earns $400 to $500 per year instead of $1.
- If you keep a checking account at Bank of America and rarely move money between accounts, the convenience may be worth the lost interest.
- Bank of America's money market account and CDs pay slightly higher rates but still lag behind online alternatives by 1% to 2%.
- You can open a high-yield savings account elsewhere and transfer money in when you need to, keeping both accounts active.
How Bank of America's interest rates compare to other banks
As of now, Bank of America's regular savings account pays around 0.01% APY. Their money market account pays slightly more—typically 0.03% to 0.05% APY depending on your balance. Online banks like Marcus, Ally, and American Express Personal Savings currently pay 4% to 5% APY on regular savings accounts with no strings attached. Credit unions often pay similar rates or higher on savings accounts for members.
The difference compounds over time. On $10,000, Bank of America earns you $1 per year. An online bank at 4.5% earns you $450 per year. Over five years, that is $2,250 in interest you would not receive by staying with Bank of America. For larger balances, the gap widens.
Bank of America's CDs do pay more than their savings account—currently around 4% to 5% depending on the term—but online banks and credit unions often match or beat those rates while offering more flexibility. If you lock money away in a CD, you cannot touch it without paying an early withdrawal penalty, so the higher rate needs to justify that trade-off.
When a Bank of America savings account makes sense
A Bank of America savings account is most useful if you already have a checking account there and you are only saving small amounts for a short time. If you move money between accounts frequently, having both in one place means fewer transfers and faster access. Some people also prefer the physical branch network—Bank of America has thousands of branches nationwide, so you can deposit cash or speak to someone in person if you need to.
The convenience argument weakens if you are trying to build real savings. If your goal is to set aside money and leave it alone, the low interest rate will frustrate you. If your goal is to have emergency cash available, you do not need to be in the same bank as your checking account—online banks transfer money in one to three business days, which is fast enough for most emergencies.
Bank of America also offers a feature called Preferred Rewards, which gives you slightly higher interest rates if you maintain a certain balance or have other accounts with them. Even with this boost, the rates remain well below what online banks offer without any conditions.
The case for opening a savings account elsewhere
If you have more than a few hundred dollars to save, opening a high-yield savings account at an online bank takes 10 minutes and costs nothing. You will earn 4% to 5% APY with no monthly fees, no minimum balance, and no lock-in period. You can withdraw money whenever you want, and transfers to your Bank of America checking account happen within one to three business days.
The only real downside is that you cannot walk into a branch and withdraw cash immediately. If you need cash urgently, you would have to use an ATM or wait for a transfer. For most people, this is not a problem—you can keep a small amount in your Bank of America checking account for immediate cash needs and keep the bulk of your savings in a high-yield account elsewhere.
Many people use both: a Bank of America checking account for daily spending and bill pay, and a high-yield savings account at an online bank for actual savings. This approach gives you the convenience of a big bank for transactions and the interest rate of a specialized savings bank for your money.
What to know about Bank of America's CDs and money market accounts
Bank of America's money market account requires a higher balance than the regular savings account and pays a slightly better rate, but the rate is still low compared to online alternatives. The account also comes with a debit card and check-writing ability, which can be useful if you want to access your money without transferring it, but this flexibility comes at the cost of lower interest.
CDs lock your money away for a set period—typically three months to five years. In exchange, you get a higher interest rate. Bank of America's CD rates are currently competitive with some online banks, but not all. Before opening a CD, compare rates across at least three providers. If you find a better rate elsewhere, there is no reason to stay with Bank of America just for the name.
One advantage of Bank of America CDs is that they are FDIC-insured up to $250,000, just like any other bank. Online banks offer the same protection, so this is not a reason to choose Bank of America over a competitor.
How to decide: questions to ask yourself
Start with how much money you are saving and how long you plan to keep it there. If you are saving less than $500 and you will need it within a few months, the interest rate barely matters—keep it in Bank of America for convenience. If you are saving $5,000 or more and you plan to leave it untouched for a year or longer, the difference between 0.01% and 4.5% is real money, and you should open an account elsewhere.
Next, think about how often you move money between accounts. If you transfer money weekly or monthly, having everything in one bank saves time. If you set money aside and forget about it, the bank does not matter—pick the one with the best rate.
Finally, consider whether you value in-person banking. If you regularly visit a Bank of America branch and like talking to a person, that convenience has value. If you do most of your banking on your phone, that value disappears, and you should chase the higher rate.
Frequently Asked Questions
Can I open a Bank of America savings account online?
Yes. You can open a savings account through the Bank of America website or mobile app in about 10 minutes. You will need a Social Security number, a valid ID, and an initial deposit. If you already have a checking account with them, the process is even faster.
What is the minimum balance for a Bank of America savings account?
There is no minimum balance requirement. You can open an account with $1 and add money whenever you want. However, the low interest rate means even a large balance earns very little.
Can I move money from Bank of America to an online bank?
Yes. You can transfer money from your Bank of America account to any other bank using an external transfer. This typically takes one to three business days. You can also set up automatic transfers if you want to move money on a regular schedule.
Does Bank of America charge fees for savings accounts?
No monthly maintenance fee. However, if you overdraft your account or fall below certain balance thresholds on linked accounts, you may face other fees. Read the account terms carefully before opening.
Is my money safe in a Bank of America savings account?
Yes. Bank of America is FDIC-insured, meaning deposits up to $250,000 are protected by the federal government. Your money is just as safe at Bank of America as it is at any other FDIC-insured bank, including online banks.