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

Bank of America's standard savings account earns interest, but the rate is substantially lower than what you will find at online banks or credit unions. As of early 2024, BofA's regular savings account pays around 0.01% annual percentage yield (APY) on balances under $100,000, which means $10,000 sitting in that account earns roughly $1 per year. Online banks routinely offer 4% to 5% APY on savings accounts, making the difference material if you are holding money for more than a few months.

BofA does offer a Money Market account, which typically pays a slightly higher rate than savings, but it still lags behind what online competitors provide. The bank's structure reflects a common pattern: physical branches and ATM networks cost money to maintain, and that cost gets passed to customers through lower interest rates.

Key Takeaways

  • Bank of America's savings account pays around 0.01% APY, while online banks pay 4% to 5%, meaning your money grows much faster elsewhere if you are saving for a specific goal.
  • BofA's Money Market account pays slightly more than savings but still significantly less than online alternatives.
  • The difference matters most if you are holding $5,000 or more and plan to keep it untouched for six months or longer.
  • If you need BofA's branch access or ATM network for other reasons, the low savings rate may be a trade-off you accept rather than a reason to stay.

Where Bank of America's savings rate sits compared to other banks

The gap between BofA and online banks has widened significantly since 2022. When the Federal Reserve began raising interest rates, online banks passed those increases to customers almost when ready. Bank of America raised rates more slowly and to lower levels, which is typical for large brick-and-mortar banks.

A concrete example: $25,000 in a BofA savings account earning 0.01% APY generates $2.50 per year. The same $25,000 at an online bank earning 4.5% APY generates $1,125 per year. Over three years, that is a difference of roughly $3,360. Credit unions sometimes offer rates between these two extremes, particularly if you meet minimum balance or direct-deposit requirements.

BofA's Money Market account typically pays 0.05% to 0.10% APY depending on your balance tier, which is better than savings but still far below online options. The bank does not publish a single rate; instead, rates vary by account tier and change without notice.

Why Bank of America keeps savings rates low

Large banks like BofA make money primarily through lending, not through paying interest on deposits. They take your deposits and lend them out at much higher rates—mortgages at 6% to 7%, auto loans at 5% to 8%, credit cards at 18% to 25%. The difference between what they pay you and what they charge borrowers is their profit margin.

Online banks operate with lower overhead: no tellers, no branch leases, no ATM networks to maintain. They can afford to pass more of their lending profit back to depositors as interest. Bank of America's branch network and ATM access are valuable to some customers, but that value does not show up in your savings rate—you pay for it indirectly through lower interest.

When a BofA savings account might still make sense

If you already use Bank of America for checking, have a mortgage with them, or need frequent access to a physical branch, keeping a small savings account there for convenience is reasonable. The low rate matters less on smaller balances or money you access frequently.

Some customers also maintain multiple accounts: a high-yield savings account at an online bank for money they are truly saving, and a small BofA savings account as a buffer or for money they move in and out regularly. The low rate on a $2,000 buffer account costs you roughly $1 per year at 0.01% APY, which may be acceptable if the convenience is worth it.

BofA also offers a Preferred Rewards program that boosts interest rates slightly if you maintain a high balance in checking or have a mortgage with them. Even with this boost, the rates remain well below online banks, but it is worth checking if you may have access to.

How to find higher-yielding alternatives

Online banks that consistently offer 4% to 5% APY include Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Wealthfront. Credit unions often offer competitive rates if you meet their membership requirements—some require you to live or work in a specific area, others require you to be part of a particular employer or organization.

You do not have to choose between BofA and an online bank. Many people keep a checking account at BofA for its branch network and ATM access, then move money they want to save into a high-yield account elsewhere. Transfers between banks take one to three business days, so this works well if you are not moving money constantly.

Before opening an account anywhere, check the current rate directly on the bank's website—rates change frequently and vary by balance tier. A rate advertised in an article may have shifted by the time you read it.

What to watch if you stay with Bank of America

BofA's savings account has a $25 minimum opening deposit and no monthly fee, so there is no penalty for keeping a small balance. However, the bank does charge overdraft fees on checking accounts ($35 per overdraft as of 2024), so if you link savings to checking for overdraft protection, understand that cost.

Interest rates can change at any time without notice. BofA publishes current rates on their website, but you will need to log in or call to see the exact rate for your account tier. If rates rise significantly in the future, BofA may or may not pass those increases to savers—their history suggests they move slowly.

Frequently Asked Questions

Does Bank of America have any savings account that pays a competitive rate?

No. BofA's Money Market account is their highest-yielding savings product, but it still pays less than 0.10% APY in most cases. Online banks and some credit unions pay 4% to 5% on savings accounts, making BofA's options uncompetitive for money you plan to hold long-term.

Can I get a better rate if I have a large balance?

BofA's Money Market account has tiered rates, so a $250,000 balance earns more than a $10,000 balance, but the difference is small—typically 0.05% to 0.10% APY. Even at the highest tier, you will earn far less than an online bank would pay on the same balance.

What happens to my savings if I move it to another bank?

Your money is safe during the transfer. Transfers between banks take one to three business days. You will stop earning interest at BofA once the money leaves, and you will start earning interest at the new bank once it arrives. There is no penalty for closing a BofA savings account.

Does Bank of America match rates if I tell them another bank offers more?

Bank of America does not match competitor rates. Their rates are set by the bank and do not change based on individual customer requests. If a higher rate is important to you, moving to an online bank or credit union is the only option.

Is my money insured if I keep it in a BofA savings account?

Yes. Bank of America is FDIC-insured, which means deposits up to $250,000 per account type are protected if the bank fails. This protection applies whether you earn 0.01% or 5% APY, so insurance is not a reason to choose BofA over an online bank.