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

Bank of America's standard savings account earns interest, but the rate is not competitive with high-yield accounts at online banks. As of early 2024, Bank of America's savings rates range from 0.01% to 0.04% annual percentage yield (APY) depending on your balance and account type. Online banks and credit unions regularly offer rates between 4% and 5.35% APY on savings accounts with no balance requirements.

If you bank with Bank of America for checking or other services, you have two realistic paths: keep a small emergency fund there for convenience and move larger savings to a high-yield account elsewhere, or switch your primary savings to an institution that prioritizes savings rates. Many people do both—maintaining a Bank of America account for everyday use while holding serious savings in a separate high-yield account.

Key Takeaways

  • Bank of America's savings accounts pay between 0.01% and 0.04% APY, which is far below the 4% to 5.35% available at online banks and credit unions.
  • You can open a high-yield savings account at a different bank while keeping your Bank of America checking account for daily transactions.
  • The difference between 0.04% and 4.5% APY on $10,000 is roughly $450 per year in lost interest.
  • Bank of America offers no promotional rates or special savings products designed to compete with high-yield accounts.

Why Bank of America's rates are lower

Large national banks like Bank of America keep savings rates low because they do not need to compete aggressively for deposits. They have millions of customers with checking accounts, credit cards, and mortgages, so they can afford to pay minimal interest on savings. Online banks and credit unions, by contrast, have lower overhead costs and depend on attracting deposits through competitive rates.

Bank of America does offer premium accounts like the Preferred Rewards program, which gives slightly higher rates to customers who maintain large balances or have multiple products with the bank. Even with these tiers, the rates remain well below what you would earn elsewhere. A Preferred Rewards customer might earn 0.04% APY instead of 0.01%, which is still negligible compared to online alternatives.

What Bank of America savings products actually exist

Bank of America offers a regular savings account and a money market account. The money market account typically pays a slightly higher rate than savings but requires a higher minimum balance—often $2,500 or more—and limits your monthly withdrawals. Neither product is designed to compete on rate.

Bank of America also offers certificates of deposit (CDs), which lock your money away for a set term in exchange for a may provide rate. These rates are also low compared to CD rates at online banks. If you are considering a CD, compare Bank of America's rate to what Ally, Marcus, or other online banks are offering for the same term length before deciding.

How much you lose by keeping savings at Bank of America

The gap between Bank of America's rate and a high-yield account compounds quickly. On $10,000, earning 0.04% APY at Bank of America generates $4 per year in interest. The same $10,000 at 4.5% APY earns $450 per year. Over five years, that difference is roughly $2,200 in lost interest (assuming rates stay constant and you do not add or withdraw money).

The math gets worse with larger balances. On $50,000, the annual difference is about $2,250. On $100,000, it is roughly $4,500 per year. Even if you only move part of your savings to a high-yield account, the interest gain is real and worth the five minutes it takes to open an account elsewhere.

Where to move your savings instead

Online banks like Ally, Marcus, American Express Personal Savings, and Wealthfront all offer high-yield savings accounts with rates between 4% and 5.35% APY. Credit unions often offer competitive rates as well, especially if you are a member. These accounts have no monthly fees, no minimum balance requirements, and FDIC insurance up to $250,000 (or NCUA insurance for credit unions).

Opening an account at an online bank takes about 10 minutes. You provide your name, address, Social Security number, and initial deposit method. Transfers between your Bank of America account and a new high-yield account are free and typically clear within one to three business days. You can keep your Bank of America account open for checking or other purposes while your savings sit elsewhere earning real interest.

Should you keep any money at Bank of America

Many people maintain a Bank of America savings account for convenience—to hold a small emergency fund or to keep money liquid for immediate needs. If you use Bank of America for checking and have a branch nearby, keeping $500 to $2,000 in savings there for quick access makes sense. The interest loss on that amount is minimal.

For anything beyond immediate emergency access, move the money to a high-yield account. If you have $20,000 or more in savings, the interest difference alone justifies opening a second account. You do not have to choose one bank or the other; most people use both.

Frequently Asked Questions

Does Bank of America have any savings account that earns a decent rate?

No. Bank of America's highest-paying savings product is the money market account at roughly 0.04% to 0.05% APY, which is still far below online banks. If you want a competitive rate, you will need to open an account elsewhere.

Can I transfer money from Bank of America to a high-yield savings account easily?

Yes. Once you open a high-yield account, you can link it to your Bank of America checking account and transfer money for free. Transfers typically take one to three business days. You can set up recurring transfers if you want to move money regularly.

Will I lose FDIC insurance if I move my savings to another bank?

No. All legitimate online banks and credit unions are FDIC or NCUA insured. Your deposits are protected up to $250,000 per account at each institution. Moving your savings does not change your insurance coverage.

What if I want to keep everything at one bank for simplicity?

If simplicity matters more to you than interest, that is a valid choice. Just understand the cost: on $25,000 in savings, you are giving up roughly $1,100 per year in interest by staying at Bank of America instead of moving to a 4.5% account. Decide if that trade-off is worth it to you.

Do online banks have any downsides compared to Bank of America?

Online banks have no physical branches, so you cannot deposit cash or speak to someone in person. If you need those services, you can keep a Bank of America account for deposits and transfers while holding savings elsewhere. Most online banks accept mobile check deposits and transfers from other banks, which covers most needs.