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

Bank of America's standard savings accounts earn interest rates well below what you can find elsewhere. As of now, Bank of America offers a regular savings account with a rate that changes based on your balance and account type, but it does not compete with high-yield savings accounts (HYSAs) offered by online banks and credit unions.

A high-yield savings account is a savings account that pays significantly more interest on your money than a traditional savings account. The difference matters: an online bank might pay 4% or 5% annual interest, while Bank of America's savings account typically pays less than 0.1%. On $10,000, that gap means you earn roughly $400 to $500 per year at an online bank instead of $10 at Bank of America.

If you want higher interest on your savings while keeping your money at Bank of America, your only option is a Bank of America money market account, which pays slightly more than their savings account but still falls short of what online banks offer.

Key Takeaways

  • Bank of America's savings accounts pay less than 0.1% interest, which is significantly lower than high-yield savings accounts offered by online banks.
  • Bank of America does not offer a product specifically labeled as a high-yield savings account.
  • A money market account at Bank of America pays more interest than their savings account, but still less than online HYSAs.
  • If earning higher interest is your main goal, you may want to compare Bank of America's rates with online banks and credit unions before deciding where to keep your savings.

Why Bank of America's rates are lower

Bank of America is a large brick-and-mortar bank with thousands of physical branches across the country. Maintaining those branches, employing tellers, and running customer service centers costs money. The bank passes some of those costs to customers by offering lower interest rates on savings accounts.

Online banks have no physical locations and far fewer employees. They can afford to pay higher interest rates because their operating costs are much lower. When you open a savings account at an online bank, you are essentially trading in-person service for a better rate on your money.

What Bank of America savings accounts actually offer

Bank of America has three main savings products: the Regular Savings Account, the Advantage Savings Account, and the Money Market Account. The Regular Savings Account is their basic option and requires no minimum balance. The Advantage Savings Account offers slightly higher interest if you maintain a higher balance and meet other account requirements.

The Money Market Account pays more interest than either savings account, but requires a higher opening deposit (typically $2,500) and charges a fee if your balance drops below that minimum. Even with these requirements, the interest rate still lags behind what online banks pay.

All three accounts come with the advantage of being able to walk into a Bank of America branch if you need to deposit cash, withdraw money in person, or speak to someone face-to-face. That convenience has value to some people, but it comes at the cost of lower interest earnings.

How to compare Bank of America against online alternatives

If you are deciding whether to keep your savings at Bank of America or move to an online bank, start by looking at the current interest rate each one offers. Bank of America publishes their rates on their website; online banks do the same. Write down the rate and the minimum balance required, then calculate how much interest you would earn on the amount you plan to save.

Next, think about what you actually use your savings account for. If you regularly deposit cash and need to access it quickly in person, Bank of America's branches might be worth the lower rate. If you rarely touch your savings and mainly want it to grow, an online bank's higher rate will earn you significantly more money over time.

You do not have to choose one or the other. Many people keep a checking account at Bank of America for everyday banking and a high-yield savings account at an online bank for long-term savings. This approach gives you the convenience of a physical bank and the earning power of an online account.

Online banks and credit unions that do offer high-yield savings

Dozens of online banks and credit unions offer high-yield savings accounts. Some of the larger ones include Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank. Credit unions often offer competitive rates as well, and you may be able to join one based on where you work, where you live, or organizations you belong to.

When comparing options, look at three things: the interest rate, whether there are monthly fees, and whether the account is insured by the FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration). FDIC and NCUA insurance protect your money up to $250,000 if the bank or credit union fails, so you want that protection.

Interest rates change frequently, so the rate you see today may not be the rate you get tomorrow. Most online banks adjust their rates based on what the Federal Reserve does with interest rates. When the Fed raises rates, online banks typically raise their rates quickly. When the Fed lowers rates, online banks lower theirs as well.

Moving money from Bank of America to an online savings account

If you decide to open a high-yield savings account elsewhere, you can transfer your money from Bank of America without closing your Bank of America account. Most online banks let you link your Bank of America checking or savings account and transfer money electronically. The transfer usually takes one to three business days.

You can also withdraw cash from Bank of America and deposit it into your new account, though this is slower and less convenient. Some people keep a small amount in their Bank of America savings account for emergencies and move the bulk of their savings to an online bank.

Frequently Asked Questions

Can I get a higher interest rate at Bank of America if I have more money in the account?

Bank of America's Advantage Savings Account pays slightly more interest if you maintain a higher balance and meet other requirements like setting up direct deposit. However, even with these conditions met, the rate is still much lower than what online banks offer. The difference in earnings between Bank of America's highest rate and an online bank's rate remains substantial.

Is my money safe in a Bank of America savings account?

Yes. Bank of America is FDIC-insured, which means your money is protected up to $250,000 if the bank fails. Online banks and credit unions that offer high-yield savings are also FDIC or NCUA-insured, so safety is not a reason to choose Bank of America over an online option.

What if I need to withdraw my money quickly from an online bank?

You can transfer money from an online savings account back to your Bank of America checking account in one to three business days, or withdraw it directly from the online bank. Most online banks do not limit how often you can withdraw, though some have restrictions on transfers. Check the specific bank's rules before opening an account.

Do I need to close my Bank of America account to open a high-yield savings account elsewhere?

No. You can keep your Bank of America checking and savings accounts open while also having accounts at other banks. Many people do this to take advantage of different banks' strengths — using Bank of America for everyday banking and an online bank for savings growth.