Bank of America is a commercial bank that takes deposits and makes loans

Bank of America is a commercial bank — meaning it accepts deposits from individuals and businesses, offers checking and savings accounts, and lends money through mortgages, auto loans, credit cards, and business lines of credit. It is not an investment bank only, not a credit union, and not a savings bank. It operates as a full-service retail and commercial bank with branches across the United States and internationally.

The bank is also a holding company. This means Bank of America Corporation owns Bank of America, N.A. (the actual bank charter) plus dozens of subsidiaries that handle investment services, wealth management, insurance, and trading. When you open a checking account at Bank of America, you are banking with the subsidiary. When you invest through Merrill Lynch or use their investment advisory services, you are using another subsidiary owned by the same parent company.

Bank of America is one of the four largest banks in the United States by assets, along with JPMorgan Chase, Wells Fargo, and Citigroup. It is a systemically important financial institution — a designation that means regulators consider it too large to fail and subject it to stricter oversight and capital requirements than smaller banks.

Key Takeaways

  • Bank of America accepts deposits, issues credit cards and loans, and operates branches nationwide, making it a commercial bank rather than a specialized lender or investment-only firm.
  • The bank is structured as a holding company, so the parent corporation owns multiple subsidiaries including the deposit bank, Merrill Lynch, and other financial service divisions.
  • Bank of America is regulated by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation because it holds customer deposits.
  • The bank operates internationally and serves both individual consumers and large corporations, distinguishing it from community banks or credit unions that serve narrower markets.

How Bank of America differs from credit unions and savings banks

A credit union is a member-owned cooperative; Bank of America is a for-profit corporation owned by shareholders. Credit unions typically serve a specific group — employees of a company, members of a profession, or people in a geographic area. Bank of America serves anyone who walks through the door or opens an account online. Credit unions often charge lower fees and pay higher interest on savings, but they have fewer branches and less technology infrastructure than large commercial banks.

A savings bank (or thrift) historically focused on mortgages and savings accounts for individuals. Bank of America does offer mortgages and savings products, but it also operates a full investment bank, issues credit cards at scale, and serves corporate clients with treasury services and lending. The distinction matters less today because many savings banks have converted to commercial bank charters or been acquired, but the structural difference remains: Bank of America's business model is broader and more complex.

What regulators oversee Bank of America

Bank of America operates under a federal charter issued by the Office of the Comptroller of the Currency (OCC), which is part of the U.S. Treasury Department. The OCC examines the bank's lending practices, risk management, and compliance with federal banking law. The Federal Reserve supervises Bank of America as a holding company and sets capital and liquidity requirements. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per account holder, per bank, per ownership category.

Because Bank of America is large enough to pose a risk to the financial system if it failed, it must submit annual stress tests to the Federal Reserve showing it can survive severe economic downturns. It must also maintain higher capital reserves than smaller banks and follow stricter rules on executive compensation and risk-taking.

The difference between Bank of America's retail and commercial divisions

Bank of America's Consumer Banking division handles checking accounts, savings accounts, credit cards, auto loans, and mortgages for individuals and small businesses. This is what most people interact with when they visit a branch or use the mobile app. The Global Banking division serves large corporations, governments, and institutions with treasury services, commercial lending, and cash management. The Global Markets division trades securities, manages investments, and provides advisory services.

A customer with a checking account and a mortgage uses the Consumer Banking division. A Fortune 500 company that needs to manage payroll across multiple countries and access credit lines uses Global Banking. These divisions operate under the same parent company but serve different markets and use different pricing models.

Why Bank of America's size matters to you as a customer

Size brings advantages: Bank of America has thousands of branches and ATMs, 24/7 customer service, mobile banking technology, and the ability to offer competitive rates on mortgages and auto loans because it can spread risk across millions of customers. It also means the bank has the resources to invest in fraud detection and security.

Size also brings trade-offs. Large banks typically charge monthly maintenance fees on checking accounts (though these can be waived with direct deposit or minimum balances). They may have longer wait times at branches during peak hours. Their customer service representatives follow scripts and have less authority to negotiate on fees or terms than employees at smaller banks. If you have a dispute, escalating the issue can take longer at a large institution.

How Bank of America's charter and structure affect your deposits

Because Bank of America holds a federal charter and accepts deposits, your deposits are insured by the FDIC up to $250,000 per account category. This means if the bank failed, the FDIC would pay you back (up to the limit) from an insurance fund. You do not need to do anything to activate this protection — it is automatic.

The holding company structure also matters: if Bank of America's investment or trading divisions lose money, those losses do not directly affect your deposit account. The subsidiary that holds your deposits is separate from the subsidiaries that trade securities or manage hedge funds. Regulators enforce this separation to protect depositors.

Frequently Asked Questions

Is Bank of America a government bank?

No. Bank of America is a private, for-profit corporation owned by shareholders. It is regulated by government agencies (the Federal Reserve, OCC, and FDIC) but is not owned or operated by the government. The U.S. government does not may provide your deposits — the FDIC does, using an insurance fund.

Can Bank of America fail?

Any bank can fail, but Bank of America is considered too large and interconnected to fail without triggering a broader financial crisis. The Federal Reserve monitors it closely and requires it to maintain high capital reserves. If it did fail, the FDIC would step in to protect deposits up to $250,000 per account.

What is the difference between Bank of America and Bank of America, N.A.?

Bank of America Corporation is the holding company (the parent). Bank of America, N.A. is the actual bank subsidiary that holds your deposits and issues loans. When you open an account, you are banking with the N.A. subsidiary, but the parent company owns and controls it.

Does Bank of America own other banks?

Bank of America owns subsidiaries that provide financial services — Merrill Lynch (investment management), U.S. Trust (wealth management), and others — but it does not own other retail banks with separate charters. It is a single bank holding company with multiple service divisions.