What Bank of America offers in high-yield savings

Bank of America does not currently offer a dedicated high-yield savings account. The bank's standard savings products—Money Market Accounts and regular savings accounts—earn interest rates well below what you'll find at online banks and credit unions. As of early 2024, Bank of America's Money Market Account earns around 0.01% APY on balances under $100,000, which means $10,000 would earn roughly $1 per year.

If you already bank with Bank of America and want to keep your savings there, the Money Market Account is your only option for interest-bearing savings. It requires a $2,500 minimum opening deposit and has no monthly maintenance fee if you maintain that balance. But the rate is not competitive with what other institutions offer.

Bank of America's strategy has been to focus on checking accounts, credit cards, and investment products rather than competing on savings rates. If earning meaningful interest on your savings is your goal, you'll need to look elsewhere—or split your money between Bank of America for checking and another institution for savings.

Key Takeaways

  • Bank of America's Money Market Account earns less than 0.01% APY, making it one of the lowest rates available in the market.
  • Online banks and credit unions currently offer rates between 4% and 5% APY on high-yield savings accounts, a significant difference over time.
  • You can keep a checking account at Bank of America while holding a savings account at a different bank that pays higher interest.
  • Bank of America does not charge monthly fees on Money Market Accounts if you maintain the $2,500 minimum balance.

How Bank of America's rates compare to other banks

The gap between Bank of America and online banks is substantial. An online bank offering 4.5% APY on a high-yield savings account would earn you $450 per year on a $10,000 balance. Bank of America's Money Market Account would earn $1. Over five years, that difference grows to $2,250 versus $5—a real cost to keeping your money in the wrong place.

Credit unions often offer competitive rates as well, sometimes matching or beating online banks. If you're a member of a credit union or can join one through your employer or community, that's worth checking before opening a new account elsewhere.

The reason for the gap is structural: Bank of America has physical branches, employees, and overhead costs that online banks don't carry. Those costs get passed to customers through lower rates. You're paying for the convenience of walking into a branch, whether you use it or not.

Whether to split your banking between institutions

Many people keep a checking account at a traditional bank like Bank of America for everyday spending and bill pay, then hold savings at an online bank or credit union for the higher rate. This approach works well if you're comfortable managing two logins and transferring money between accounts when needed.

Transfers between banks typically take one to three business days using ACH (the standard electronic transfer system). If you need faster access to your savings, some online banks offer same-day transfers or allow you to link external accounts for when ready movement of funds. Check the specific bank's transfer options before opening an account.

The main drawback is that you lose the simplicity of having everything in one place. You'll receive statements from two institutions, manage two passwords, and need to track balances across both. For most people, the extra interest earned makes this worthwhile—but only if you actually move your savings to the higher-rate account.

What to look for in a high-yield savings account elsewhere

If you decide to move your savings outside Bank of America, focus on three things: the current APY rate, whether the rate is variable or fixed, and the FDIC insurance coverage. Most online banks are FDIC-insured up to $250,000 per depositor, the same as Bank of America, so that protection is standard.

Variable rates—which change based on the Federal Reserve's actions—are normal for savings accounts. When the Fed raises rates, your APY goes up. When it cuts rates, your APY falls. This is different from a CD (certificate of deposit), which locks in a fixed rate for a set term. If you want to know what you'll earn six months from now, a CD is more predictable. If you want flexibility and the highest current rate, a high-yield savings account is the right choice.

Check whether the bank charges monthly fees, requires a minimum balance, or limits how many withdrawals you can make per month. Most online banks have no monthly fees and no withdrawal limits, but it's worth confirming before you open an account.

How to move money from Bank of America to another bank

If you decide to open a high-yield savings account elsewhere, moving your money is straightforward. You have two main options: initiate an ACH transfer from the new bank's website (where you'll provide your Bank of America account number and routing number), or initiate the transfer from Bank of America's website by providing the receiving bank's details.

The transfer typically takes one to three business days. During that time, the money is in transit and you can't access it from either account. Plan accordingly if you need the funds for an upcoming expense.

You don't need to close your Bank of America account to move your savings elsewhere. You can keep your checking account open there and straightforward stop using the savings account, or close it once the transfer is complete. Bank of America doesn't charge a fee to close an account.

When Bank of America's Money Market Account might make sense

There are a few situations where keeping savings at Bank of America is reasonable despite the low rate. If you hold a large balance and may have access to for Bank of America's Preferred Rewards program through a checking account or investment account, you may earn a small rate bump on your Money Market Account. The boost is modest—typically 0.25% to 0.75% higher than the standard rate—but it's better than nothing if you're already a customer.

If you have a small amount of savings (under $1,000) and value the simplicity of one bank, the difference in interest earned is minimal. You might earn $5 per year instead of $45, which is a real difference but not life-changing. The convenience of one login and one statement might be worth it to you.

If you use Bank of America's investment services and want to keep everything in one place for ease of management, that's a valid reason too. Some people prioritize simplicity over maximum returns, and that's a legitimate choice.

Frequently Asked Questions

Can I earn interest on my Bank of America checking account?

Most Bank of America checking accounts earn no interest. A few specialty accounts like the Premium Rewards Checking earn a small amount, but the rate is still well below market. Check your specific account type on Bank of America's website, but don't expect meaningful interest from a checking account.

What's the difference between a Money Market Account and a high-yield savings account?

Both are savings products that earn interest. A Money Market Account sometimes comes with a debit card and check-writing ability, while a high-yield savings account is typically for savings only. The key difference is the interest rate: Bank of America's Money Market Account earns very little, while high-yield savings accounts at online banks earn much more.

If I move my savings to another bank, will I lose FDIC protection?

No. Most online banks and credit unions are FDIC-insured just like Bank of America. Your deposits are protected up to $250,000 per account. Verify that the bank you choose displays FDIC insurance information on its website before you open an account.

How often do high-yield savings rates change?

Rates change when the Federal Reserve adjusts its benchmark interest rate, which happens several times per year. Banks typically update their rates within days of a Fed announcement. Your rate can go up or down, so check your account's APY periodically to see if it's still competitive.

Can I have accounts at both Bank of America and another bank at the same time?

Yes. There's no rule against banking at multiple institutions. Many people do this specifically to keep checking at one bank and savings at another. You'll manage two logins and two statements, but you keep all the benefits of both accounts.