Bank of America checking accounts earn little to no interest

Bank of America's standard checking accounts pay 0.01% annual percentage yield (APY) on balances, which means a $10,000 balance earns about $1 per year. This rate applies to their most common account: the BankAmericard Cash Rewards checking account and the regular Checking account. The rate does not change based on how much money you keep in the account.

Some Bank of America accounts offer slightly higher rates if you meet specific conditions. The Advantage Plus Banking account pays 0.01% APY on balances under $25,000 and 0.02% APY on balances of $25,000 or more. These rates are still very low compared to what online banks and high-yield savings accounts offer elsewhere.

Bank of America does not publish a single "checking account interest rate" because the rate depends on which account type you hold. The bank updates rates periodically, but changes are usually small and happen without advance notice. You can see your account's current rate by logging into your online banking portal or calling 1-800-432-1000.

Key Takeaways

  • Bank of America's standard checking accounts earn 0.01% APY, which generates about $1 per year on a $10,000 balance.
  • The Advantage Plus Banking account pays 0.02% APY on balances of $25,000 or more, but still earns very little interest.
  • Bank of America checking accounts are designed for transaction access, not for saving money or earning meaningful interest.
  • If earning interest on your checking balance is important to you, online banks and credit unions often offer rates 10 to 50 times higher.

Why Bank of America checking rates are so low

Banks set checking account interest rates based on what they earn from lending out customer deposits and what they pay to attract deposits. Bank of America, as a large national bank, does not need to offer high rates to keep checking customers because most people choose checking accounts for convenience and access to branches, not for interest earnings.

Checking accounts are meant to hold money you spend regularly, not money you save. Banks assume you will withdraw from checking frequently, so they do not commit to paying high rates. If you want to earn interest, banks expect you to move money into a savings account or money market account, where rates are higher but withdrawal rules are stricter.

How to find your account's current rate

Log into your Bank of America online account and look for the account details or account information section. The APY should appear next to your account balance. You can also call Bank of America customer service at 1-800-432-1000 and ask a representative to tell you the current rate on your specific account.

If you receive paper statements, the APY may be printed on your monthly statement, though not always. Bank of America also publishes rate information on their website under the account type you hold, but the rates shown there are current as of the publication date and may have changed since.

Comparing Bank of America checking to other banks

Online banks and some credit unions offer checking accounts with rates between 0.5% and 2.0% APY, depending on the institution and current market conditions. A $10,000 balance at 1.0% APY earns $100 per year, compared to $1 at Bank of America's 0.01% rate. The tradeoff is that online banks have no physical branches, so you cannot deposit cash in person or speak to someone face-to-face.

Credit unions sometimes offer higher checking rates to members, especially if you maintain a minimum balance or set up direct deposit. However, credit unions have limited branch networks and may charge fees if you use out-of-network ATMs. Bank of America has thousands of branches and ATMs nationwide, which is why many people keep accounts there even though the interest rate is low.

If you keep most of your money in a Bank of America checking account and rarely move it, you are giving up significant interest earnings. Moving even part of your balance to a high-yield savings account at another bank could earn you hundreds of dollars per year with no additional work.

Interest rates on Bank of America savings and money market accounts

Bank of America's savings accounts and money market accounts pay higher rates than checking, but still below what many online banks offer. Rates vary by account type and balance level, and the bank does not advertise these rates prominently on their website. You can see current rates by logging into your account or calling customer service.

If you want to earn more interest while staying with Bank of America, moving money from checking to a savings account is straightforward. You can set up a transfer online in minutes. The downside is that savings accounts have withdrawal limits (though these have been relaxed in recent years), and you lose the convenience of a debit card for everyday spending.

What happens to interest if you close your account

If you close a Bank of America checking account, you receive no interest on the final balance. The bank calculates interest daily but pays it only if the account remains open. If you are thinking about switching banks, move your money before you close the account to avoid losing any accrued interest.

Interest is typically paid monthly, on the last day of the month or the first day of the next month, depending on the account. The amount is usually so small that it does not appear as a separate line item on your statement; it is added directly to your balance.

Frequently Asked Questions

Does Bank of America charge a fee to earn interest on checking?

No. Bank of America does not charge a fee to earn the interest your account generates. However, many Bank of America checking accounts do charge monthly maintenance fees ($12 to $15) unless you meet conditions like maintaining a minimum balance or setting up direct deposit. These fees can wipe out any interest you earn.

Can I get a higher interest rate by keeping more money in my checking account?

Not with most Bank of America checking accounts. The standard rate of 0.01% applies regardless of your balance. The Advantage Plus Banking account does pay 0.02% on balances of $25,000 or more, but that is still very low. If you want rates that increase with your balance, you need to look at savings accounts or accounts at other banks.

How often does Bank of America change its checking account interest rates?

Bank of America can change rates at any time without notice. Rates typically move when the Federal Reserve changes its benchmark interest rate, but the bank is not required to pass those changes along to customers. You should check your account details periodically or call customer service if you want to know whether your rate has changed.

Is the interest I earn on my Bank of America checking account taxable?

Yes. Any interest you earn, no matter how small, is taxable income. Bank of America will send you a Form 1099-INT at the end of the year if you earned $10 or more in interest across all your accounts at the bank. You report this on your tax return.

Should I move my money to a different bank for better checking account interest?

It depends on what you value. If you use Bank of America's branches and ATMs frequently and need a checking account for everyday spending, the low interest rate may not matter much. If you keep a large balance in checking and rarely visit a branch, moving to an online bank with a higher rate could earn you hundreds of dollars per year with no extra effort.