Yes, Bank of America savings accounts earn interest, but the rate is usually very low

Bank of America savings accounts do earn interest. The bank pays you a small percentage of your balance each month, and that interest gets added to your account. However, the rate Bank of America pays is typically much lower than what you can find at online banks or credit unions — often less than 0.01% per year, which means you earn just a few dollars on a $1,000 balance.

The actual rate changes over time and varies depending on which type of savings account you open. Bank of America publishes its current rates on its website, and you can call a branch or log into your online account to see the exact rate before you open an account.

Interest rates across the banking industry move together because they follow the federal funds rate, which the Federal Reserve adjusts several times a year. When the Fed raises rates, Bank of America and other banks eventually raise theirs too — but they usually raise them more slowly than online banks do, and they lower them faster when rates fall.

Key Takeaways

  • Bank of America savings accounts earn interest monthly, but the rate is typically lower than online banks offer for the same type of account.
  • The interest rate varies by account type and changes when the Federal Reserve adjusts the federal funds rate.
  • You can see Bank of America's current rates on its website or by calling your local branch before opening an account.
  • If earning more interest is your main goal, online banks and credit unions often pay significantly higher rates on savings accounts.

The different Bank of America savings account types and their rates

Bank of America offers several savings account options, and each one earns interest at a different rate. The most common is the Regular Savings Account, which has no monthly fee if you keep a minimum balance (usually $300). This account earns the lowest interest rate.

The Premium Savings Account requires a higher minimum balance — typically $10,000 or more — and pays a slightly higher interest rate in return. If your balance drops below the minimum, you pay a monthly fee.

Bank of America also offers Money Market Accounts, which combine features of savings and checking accounts. These accounts come with a debit card and checks, earn interest on your balance, and usually pay a higher rate than savings accounts — but they also require a larger minimum balance and charge monthly fees if you fall below it.

All of these accounts are FDIC insured, which means the federal government guarantees your money up to $250,000 per account type, per bank, even if Bank of America fails. This protection applies no matter what interest rate the account earns.

How interest is calculated and when you receive it

Bank of America calculates interest on your account daily but pays it to you monthly. This means the bank looks at your balance every single day, adds up those daily balances, and then at the end of the month divides by the number of days to get an average balance. It then multiplies that average by the annual interest rate and divides by 12 to get your monthly payment.

The interest payment appears in your account on the first business day of the next month. If you have $1,000 in a savings account earning 0.01% per year, you would earn roughly $0.08 per month — less than a dime. The exact amount depends on how many days are in the month and whether your balance changed during that month.

If you withdraw money during the month, your average balance goes down, and so does your interest payment. If you deposit money, your average balance goes up. This is why people who want to earn more interest often move their money to accounts with higher rates.

Why Bank of America rates are lower than online banks

Bank of America has physical branches in thousands of locations, and maintaining those buildings, hiring tellers, and running customer service centers costs money. Online banks have no branches — customers do everything through a website or app. Because online banks have much lower costs, they can afford to pay higher interest rates and still make a profit.

You pay for Bank of America's convenience and personal service through lower interest rates. If you rarely visit a branch and mainly use online banking anyway, you are paying for something you do not use.

The difference adds up over time. On a $10,000 balance, Bank of America might pay $10 per year while an online bank pays $200 per year. Over five years, that is a $950 difference on the same amount of money.

When it makes sense to keep money at Bank of America

If you use Bank of America for checking and need to move money between accounts frequently, keeping your savings there too can be convenient. Transfers between your own accounts happen when ready, and you can visit a branch if you need cash or have questions.

If you are new to banking and want to keep all your money in one place while you learn how accounts work, Bank of America is a stable, well-known option. The interest rate is low, but your money is safe and you can access it whenever you need it.

If you have a very small balance — under $500 — the difference in interest between Bank of America and an online bank is only a few dollars per year, so convenience might matter more than the rate.

How to find Bank of America's current interest rates

Bank of America updates its interest rates on its main website under the Savings Accounts section. You can also call your local branch and ask a representative what the current rate is for the specific account type you are interested in. Rates can vary slightly by region, though most of the country sees the same rates.

Before you open an account, write down the rate you see and the date you checked it. Interest rates change frequently, so knowing what you were quoted helps if you have questions later.

You can also compare Bank of America's rates to other banks using rate comparison websites, though you will need to check those sites' accuracy yourself — they are not official sources.

Frequently Asked Questions

Does Bank of America charge a fee to earn interest?

No. Interest is free — the bank straightforward pays you a percentage of your balance each month. However, some savings accounts charge monthly maintenance fees if your balance falls below the minimum required. Those fees can be higher than the interest you earn, so read the account terms before opening.

Can I move my savings to a higher-rate account later?

Yes. You can open a new account at any bank at any time and transfer your money. There is no penalty for closing a Bank of America savings account. If you move to an online bank, the transfer usually takes three to five business days.

What happens to my interest if I withdraw money mid-month?

Your interest payment for that month is based on your average daily balance, so withdrawals lower the amount you earn. If you withdraw $5,000 on the 15th of a 30-day month, you earn interest on the full amount for 15 days and the reduced amount for 15 days, then receive one payment at month's end.

Is my interest may provide to stay the same?

No. Bank of America can change its interest rates at any time, and it usually does when the Federal Reserve changes the federal funds rate. You will not earn the same rate forever — it will go up and down based on what happens in the broader economy.

How much interest would I actually earn on $5,000?

At a typical Bank of America rate of 0.01% per year, you would earn about $0.42 per year, or roughly $0.04 per month. At an online bank rate of 4.5% per year, you would earn about $225 per year, or roughly $18.75 per month — a significant difference on the same balance.