Bank of America does not offer a dedicated high yield savings account
Bank of America's standard savings account pays 0.01% annual percentage yield (APY) on most balances, which is far below what other banks offer. If you keep money at Bank of America and want better returns on savings, you have two paths: move the money to a different bank that specializes in high yield savings, or use Bank of America's Money Market Account, which pays a higher rate but still typically lags behind online-only banks.
The reason Bank of America does not compete on savings rates is structural. Large branch networks and physical locations cost money to maintain. Online banks with no branches can pass those savings to depositors through higher rates. Bank of America prioritizes checking account customers and loan products, not savings account rates.
If you have a Bank of America checking account and want to keep your money in one place, the Money Market Account is the only option that beats the standard savings rate. If you are willing to move money elsewhere, you can find rates three to five times higher at banks like Marcus, Ally, or American Express Personal Savings.
Key Takeaways
- Bank of America's standard savings account pays 0.01% APY, which does not keep pace with inflation.
- Bank of America's Money Market Account pays a higher rate but typically remains below what online-only banks offer.
- The difference between Bank of America's rate and a high yield savings account elsewhere can mean hundreds of dollars per year on a $10,000 balance.
- Moving money to a separate high yield savings account does not require closing your Bank of America checking account.
Bank of America Money Market Account rates and requirements
Bank of America's Money Market Account is the closest product to a high yield savings account within the bank. The rate varies based on your balance tier and whether you maintain a Bank of America checking account. As of early 2024, rates range from 0.01% APY on balances under $10,000 to around 0.04% to 0.05% APY on larger balances, though these rates change frequently and vary by region.
To open a Money Market Account at Bank of America, you need a minimum deposit of $2,500. The account comes with a debit card and allows six withdrawals per month before fees explore. After six withdrawals, Bank of America charges $10 per withdrawal. This withdrawal limit makes it less suitable for frequent access to your money.
The Money Market Account does pay interest on your full balance, and interest compounds daily. However, the rate remains significantly lower than what you would earn at an online bank. On a $50,000 balance, Bank of America's Money Market Account might earn $20 to $25 per year, while a high yield savings account at an online bank could earn $2,000 to $2,500 per year at current rates.
How Bank of America savings rates compare to other banks
Bank of America's rates are among the lowest in the banking industry. Most online savings accounts currently offer rates between 4% and 5% APY, depending on market conditions. Credit unions sometimes offer competitive rates as well, though they typically require membership in a specific geographic area or professional group.
The gap between Bank of America and high yield savings accounts has widened significantly since 2022, when the Federal Reserve began raising interest rates. Banks that depend on deposits to fund loans passed those higher rates to savers. Bank of America, which has a large deposit base and diverse revenue streams, did not raise savings rates proportionally.
| Account Type | Bank of America Rate (approximate) | Online Bank Rate (approximate) | Annual Earnings on $25,000 |
|---|---|---|---|
| Standard Savings | 0.01% | 4.5% | $2.50 vs. $1,125 |
| Money Market | 0.04% | 4.5% | $10 vs. $1,125 |
These figures shift as the Federal Reserve adjusts rates and as individual banks respond to market conditions. Check current rates directly on each bank's website before moving money, because rates can change monthly.
When it makes sense to keep savings at Bank of America
If you use Bank of America for checking and need when ready access to savings for emergencies, keeping a small emergency fund in the Money Market Account simplifies your banking. You can transfer money between accounts when ready through the Bank of America app, and you avoid the one to two business days it typically takes to move money from an external bank.
If you receive frequent deposits or need to deposit checks regularly, Bank of America's branch network and mobile deposit feature may be worth more to you than the higher rate you would earn elsewhere. The convenience of walking into a branch or depositing a check through your phone has real value if you use those services.
Bank of America also offers relationship discounts on loans and credit products if you maintain a checking account and savings account with them. If you are planning to borrow money for a mortgage, auto loan, or other purpose, the rate reduction on the loan might offset the lower savings rate. Calculate this before deciding to move your savings.
How to move money to a high yield savings account
Opening a high yield savings account at another bank takes 10 to 15 minutes online. You will need your Social Security number, a government ID, and your Bank of America account number to set up external transfers. Most online banks allow you to link your Bank of America checking account and transfer money electronically within one to two business days.
You do not have to close your Bank of America accounts to open a savings account elsewhere. Many people keep a Bank of America checking account for direct deposit and bill pay while maintaining a high yield savings account at another bank for money they are not spending. This approach gives you the convenience of Bank of America's checking plus the higher returns on savings.
When you transfer money out, Bank of America does not charge a fee. The receiving bank also does not charge a fee for incoming transfers. The only cost is the opportunity cost of the lower rate you earned while the money sat at Bank of America.
FDIC insurance and safety across multiple banks
Money in a Bank of America savings account is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account type. If you open a high yield savings account at another bank, that account is also FDIC insured up to $250,000. You can safely split your savings across multiple banks without losing insurance protection, as long as each account is at a different bank or held in a different name or ownership category.
For example, you could have $250,000 in a Bank of America Money Market Account and $250,000 in a high yield savings account at Marcus, and both amounts would be fully insured. The FDIC insurance is separate for each bank and each account type.
Frequently Asked Questions
Can I earn more interest if I keep a higher balance at Bank of America?
Bank of America's Money Market Account does pay slightly more on larger balances, but the increase is minimal. A balance of $100,000 might earn 0.05% instead of 0.04%, which is still far below what online banks offer. The rate structure does not reward large deposits the way high yield savings accounts do.
What happens to my savings rate if the Federal Reserve lowers interest rates?
All savings rates, including those at online banks, will fall if the Federal Reserve cuts rates. Bank of America typically lowers rates faster than online banks do, so the gap between Bank of America and competitors may actually shrink during a rate-cutting cycle. This is one reason to lock in higher rates while they are available.
Do I need to keep a minimum balance in Bank of America savings to avoid fees?
Bank of America does not charge a monthly fee on standard savings accounts or Money Market Accounts based on balance. However, the Money Market Account charges $10 per withdrawal after six per month. If you need frequent access to your money, this fee structure makes it less practical than a high yield savings account with unlimited withdrawals.
Can I set up automatic transfers from Bank of America checking to a high yield savings account?
Yes. Once you link your external bank account to Bank of America, you can schedule recurring transfers. Many people set up automatic transfers on payday to move a portion of their paycheck directly to a high yield savings account, which helps with saving discipline and ensures the money earns a better rate when ready.