Bank of America does not offer a high-yield savings account

Bank of America's standard savings account earns no interest at all. Their Money Market account earns a variable rate that changes with the Federal Reserve, but it is not competitive with high-yield savings accounts at online banks. As of early 2024, Bank of America's Money Market account paid around 0.01% APY on balances under $10,000, while high-yield savings accounts at other institutions were paying 4% to 5% APY on the same money.

If you bank with Bank of America for convenience or because you use their checking account, moving your savings to a high-yield account elsewhere costs nothing and takes a few days. You can keep your Bank of America checking account and link a savings account at another bank for transfers. Many people do this to earn real interest without losing the branch access or debit card they already have.

Key Takeaways

  • Bank of America's savings account earns no interest; their Money Market account earns less than 0.1% APY, far below what high-yield accounts offer.
  • You do not have to close your Bank of America checking account to move savings elsewhere — you can keep both and link them for transfers.
  • Opening a high-yield savings account at an online bank takes 10 to 15 minutes and requires only your Social Security number, driver's license, and initial deposit.
  • The difference between Bank of America's rate and a high-yield rate means $10,000 earns roughly $400 to $500 per year elsewhere instead of $1 at Bank of America.

What Bank of America actually pays on savings

Bank of America offers two savings products: a basic savings account and a Money Market account. The savings account has paid 0.01% APY for years and has no minimum balance requirement. The Money Market account requires a $2,500 minimum deposit and pays a variable rate tied to the Federal Reserve's benchmark rate, but even with recent rate increases, it has remained below 0.1% APY.

These rates do not change based on how much you deposit. Whether you have $1,000 or $100,000 in a Bank of America savings account, you earn the same rate. High-yield accounts, by contrast, pay the same rate to all customers regardless of balance, but that rate is 40 to 50 times higher than what Bank of America offers.

Why Bank of America's rates lag so far behind

Bank of America is a large brick-and-mortar bank with thousands of branches, ATMs, and employees. Those physical locations and the customer service staff cost money. The bank funds its operations partly through the difference between what it pays depositors and what it charges borrowers. Because Bank of America has lower funding costs from deposits (because customers accept low rates in exchange for branch access), it does not need to compete on interest rates.

Online banks have no branches or tellers. They operate from a few data centers and a small customer service team. Their only way to attract deposits is to pay rates that match or beat the market. Because their costs are lower, they can afford to pass most of the interest they earn on your money back to you.

How to move money from Bank of America to a high-yield account

You do not need to close your Bank of America account. Open a high-yield savings account at an online bank — this takes about 15 minutes and requires your Social Security number, a government-issued ID, and your initial deposit amount. Most online banks let you fund the new account by transferring from your Bank of America checking account.

Once the transfer clears (usually one to three business days), your money is in the high-yield account and earning interest. You can set up automatic transfers from Bank of America to your high-yield account each month, or transfer money whenever you have extra cash to save. Keep your Bank of America checking account if you use it for everyday spending or need branch access — there is no penalty for having accounts at multiple banks.

If you want to move your checking account too, you can do that separately. But many people keep their checking at Bank of America and move only savings to a high-yield account, since checking accounts do not earn interest anyway.

The math: what the rate difference actually costs you

On $10,000, Bank of America's 0.01% rate earns $1 per year. A high-yield account at 4.5% APY earns $450 per year on the same $10,000. That is a difference of $449 per year, or about $37 per month, on a single $10,000 balance.

On $50,000, the difference grows to $2,245 per year. On $100,000, it is $4,490 per year. These are not small numbers, and the gap widens every year you leave money in a low-rate account. If you have savings you plan to keep for five years, the total difference between Bank of America and a high-yield account could be $2,000 to $22,000 depending on your balance.

When Bank of America might still make sense for savings

If you have less than $500 in savings and do not expect to add to it, the interest difference is negligible — you will earn a few cents either way. Bank of America might still be worth it if you value having everything in one place and do not mind the low rate.

If you need to withdraw money frequently, a high-yield savings account works just as well as Bank of America's account. You can transfer money back to your checking account in one to three business days, or use some high-yield accounts' debit cards for immediate access. The only real advantage Bank of America has is branch access, which matters only if you regularly deposit cash or need to speak to someone in person.

Frequently Asked Questions

Can I keep my Bank of America checking account and move only savings to another bank?

Yes. You can open a high-yield savings account anywhere and link it to your Bank of America checking account for transfers. Many people do this to keep their debit card and branch access while earning real interest on savings. You do not have to close anything.

How long does it take to open a high-yield account and start earning interest?

Opening takes 10 to 15 minutes online. Transferring money from Bank of America takes one to three business days. Once the transfer clears, you start earning interest immediately at the account's stated APY rate.

Will I lose FDIC protection if I move to an online bank?

No. All banks that hold deposits must carry FDIC insurance, whether they have branches or not. Your money is insured up to $250,000 per account at any FDIC-insured bank, including online banks. Check the bank's website to confirm they are FDIC-insured before opening an account.

What if I need to withdraw my savings quickly?

High-yield savings accounts are liquid — you can transfer money back to your checking account in one to three business days. Some high-yield accounts also offer debit cards for immediate access. You are not locked in like you would be with a CD.

Do high-yield rates stay the same, or do they change?

High-yield rates are variable and change when the Federal Reserve changes its benchmark rate. When rates fall, your APY falls too. When rates rise, your APY rises. Bank of America's rates also change with the Federal Reserve, but they stay much lower than high-yield accounts even when both move in the same direction.