What Bank of America offers in savings accounts

Bank of America offers several savings account types, but none of them are marketed as high-interest accounts. The bank's standard savings products include a regular savings account and a money market account, both of which earn interest, but the rates are typically lower than what you would find at online banks or credit unions.

The interest rate Bank of America pays on savings accounts changes regularly based on Federal Reserve decisions and market conditions. As of now, their savings accounts earn less than 0.05% annual percentage yield (APY) on most balances, though this figure varies and you should check their current rates directly. If earning the highest possible interest on your savings is your main goal, Bank of America's savings products are not designed to compete on rate.

Key Takeaways

  • Bank of America's savings accounts earn interest, but at rates significantly lower than online banks or credit unions offer.
  • The bank's money market account is their highest-yielding savings product, though it still typically earns less than 0.05% APY.
  • Interest rates at Bank of America change based on Federal Reserve policy and are not may provide to stay the same.
  • If you want to maximize interest earnings on savings, you may find better rates elsewhere while keeping a checking account at Bank of America.

Why Bank of America's rates are lower than other banks

Large national banks like Bank of America have higher operating costs than online-only banks. They maintain thousands of physical branches, employ tellers and loan officers, and operate call centers. These expenses are built into their business model, which means they can afford to pay less interest on deposits because customers value the branch network and customer service.

Online banks have no physical locations and lower overhead, so they can pass savings to customers in the form of higher interest rates. Credit unions are member-owned and operate on a non-profit basis, which also allows them to offer better rates. Bank of America competes on convenience and service, not on interest rate.

Bank of America's savings account types

Regular Savings Account is the basic option. It requires a minimum opening deposit (often $25 or $100, though this varies), has no monthly maintenance fee if you maintain a minimum balance, and earns a small amount of interest. This account works well if you want a straightforward place to set aside money while keeping your main checking account at the same bank.

Money Market Account is Bank of America's higher-tier savings product. It typically requires a larger minimum balance to open and to avoid monthly fees, and it pays slightly more interest than the regular savings account. Money market accounts often come with a limited number of withdrawals per month before fees explore, though federal rules on this have changed in recent years.

Both accounts are FDIC-insured up to $250,000, meaning your money is protected if the bank fails. Interest is compounded daily and credited monthly, so you earn a small amount of interest on your interest.

How Bank of America rates compare to other options

Online savings accounts at banks like Marcus, Ally, or American Express typically offer APY rates that are 10 to 20 times higher than Bank of America's rates, though exact figures change monthly. Credit unions often offer competitive rates as well, especially if you are a member. The difference adds up over time: on $10,000 in savings, the difference between 0.01% and 4.5% APY is roughly $450 per year in lost interest.

The trade-off is convenience. With an online bank, you cannot walk into a branch or speak to someone in person. With a credit union, you may have fewer ATMs or branches available. Bank of America offers when ready access to your money through 16,000+ ATMs and thousands of branches, which some people value enough to accept lower rates.

When a Bank of America savings account still makes sense

If you already have a checking account at Bank of America and want to keep all your banking in one place, opening a savings account there is straightforward and convenient. You can transfer money between accounts when ready online or at a branch, and you see everything in one login.

A Bank of America savings account also works well as a short-term holding place for money you plan to move elsewhere. For example, if you are saving for a down payment over the next few months, keeping that money in a Bank of America savings account while you have your checking account there is practical, even if the interest rate is low.

If you value in-person banking and want to discuss your savings strategy with someone face-to-face, Bank of America's branch network makes that possible. Some people prioritize this service over maximizing interest.

How to open a Bank of America savings account

You can open a savings account online, by phone, or in person at any Bank of America branch. Online is usually fastest. You will need a valid government-issued ID, a Social Security number, and an initial deposit. The bank will ask for your address and contact information.

If you already have a checking account at Bank of America, opening a savings account takes just a few minutes online. If you do not have an account yet, you can open both a checking and savings account at the same time. Bank of America will run a background check through ChexSystems, which is a banking history database, to verify you have not had problems with previous accounts.

Frequently Asked Questions

Can I earn higher interest if I keep a larger balance in my Bank of America savings account?

No. Bank of America does not offer tiered interest rates based on balance size. Whether you have $100 or $100,000 in the account, the interest rate is the same. Some banks do pay higher rates on larger balances, but Bank of America does not.

What is the difference between Bank of America's savings account and money market account?

The money market account typically requires a higher minimum balance to open and to avoid fees, and it pays slightly more interest. Money market accounts may also limit the number of withdrawals you can make per month. If you want the simplest option with no withdrawal limits, the regular savings account is easier.

If I move my savings to an online bank for better interest, can I keep my checking account at Bank of America?

Yes. Many people do this. You can have your paycheck deposited into your Bank of America checking account and transfer money to a high-interest savings account at another bank whenever you want to save. This gives you the convenience of Bank of America checking with the better rates elsewhere.

Does Bank of America charge fees on savings accounts?

Bank of America does not charge a monthly maintenance fee on savings accounts if you maintain the minimum balance required (often $25 to $100, depending on the account type). If your balance falls below the minimum, a monthly fee applies. There are no fees for deposits or transfers between your own accounts.

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

Yes. Bank of America is FDIC-insured, which means deposits up to $250,000 are protected by the federal government if the bank fails. This protection applies to each account type separately, so you could have $250,000 in a checking account and $250,000 in a savings account, both fully protected.