Yes, Bank of America savings accounts earn interest, but the rate depends on the account type and current market conditions
Bank of America offers several savings products, and nearly all of them pay interest. The amount you earn depends on which account you hold, how much money you keep in it, and what the Annual Percentage Yield (APY) is at the time you open or review your account. APY rates change frequently—sometimes weekly—so the rate you see today may not be the rate you locked in last month.
The most common Bank of America savings accounts are the Regular Savings Account and the Money Market Account. Both earn interest. Bank of America also offers CDs (Certificates of Deposit), which lock your money away for a set period but typically pay higher rates. If you have a checking account with a high balance or meet certain requirements, you may also earn interest on that account.
The catch: Bank of America's rates are usually lower than what you can find at online banks or credit unions. This matters most if you have a large balance sitting in savings. A difference of 0.5% APY on $10,000 means $50 per year in lost interest.
Key Takeaways
- Bank of America savings accounts earn interest, but rates vary by account type and change regularly based on Federal Reserve decisions.
- The Regular Savings Account and Money Market Account both pay interest, though Money Market accounts typically require a higher minimum balance.
- You can check your current APY on your account statement, in the Bank of America app, or by calling customer service.
- Bank of America rates are often lower than online banks or credit unions, so comparing rates before opening an account can save you money over time.
- Interest is calculated daily but usually credited monthly, so you earn money on your balance even if you do not touch the account.
How interest rates work at Bank of America
Bank of America sets its savings rates based on the federal funds rate, which the Federal Reserve adjusts several times per year. When the Fed raises rates, Bank of America typically raises its savings rates within days or weeks. When the Fed cuts rates, Bank of America cuts its rates too. This means your APY can change without warning, and you have no control over it.
The bank publishes its current rates on its website and in your account details. You can see your exact APY in the Bank of America mobile app under Account Details, or log into your online account and look for the interest rate disclosure. Your monthly statement also shows how much interest you earned that month.
Interest is compounded daily, which means the bank calculates interest on your balance every single day, including interest you earned the day before. This compounds your earnings over time. However, the interest is usually credited monthly—meaning it shows up in your account once a month, typically on the last business day of the month.
Types of Bank of America savings accounts and their interest rates
Bank of America offers three main savings products that earn interest:
- Regular Savings Account: No minimum balance required to open, but the APY is the lowest of the three. This account is useful if you have a small amount to save or want to start saving without a commitment.
- Money Market Account: Requires a higher minimum balance (often $2,500 to $25,000 depending on the tier) and pays a higher APY in return. You also get a debit card and limited check-writing ability. This account makes sense if you have a larger balance and want slightly better returns.
- Certificates of Deposit (CDs): You lock your money away for a set term—typically 3 months, 6 months, 1 year, or longer—and receive a fixed APY that does not change. CDs pay the highest rates but penalize you if you withdraw early.
Bank of America also offers interest-bearing checking accounts if you maintain a high balance or set up direct deposit, though these rates are typically very low. Ask your local branch or call customer service to see if you may have access to.
What affects how much interest you actually earn
Three things determine your total interest earnings: the APY, your balance, and how long you keep the money in the account. A higher APY on a larger balance for a longer time means more interest.
Your balance matters most. If you have $1,000 in savings at 0.01% APY, you earn about 10 cents per year. If you have $100,000 at the same rate, you earn about $10 per year. The difference between Bank of America's rates and an online bank's rates becomes significant only if your balance is substantial—usually $5,000 or more.
Withdrawals also affect your earnings. If you withdraw money mid-month, you lose interest on that amount for the rest of the month. Some accounts limit how many withdrawals you can make per month without a fee, though federal rules changed in 2020 and most banks no longer enforce this strictly.
How to check your current interest rate
You do not have to guess what you are earning. Bank of America makes your APY visible in several places:
- Open the Bank of America mobile app, tap on your savings account, and look for "Interest Rate" or "APY" in the account details section.
- Log into your online account at bankofamerica.com, select your savings account, and scroll to the account information section.
- Call Bank of America customer service at 1-800-432-1000 and ask for your current APY.
- Visit your local Bank of America branch and ask a representative to show you the rate on your account.
- Check your monthly statement, which lists the APY and the interest earned that month.
Write down the rate you see today. If you check again in a few weeks and the rate has dropped, that is normal—it reflects changes in the federal funds rate. If you want to compare, look up what online banks like Marcus, Ally, or American Express are offering. The difference can be striking.
When Bank of America interest rates change
Bank of America does not announce rate changes in advance. The bank adjusts its rates whenever the Federal Reserve meets and makes a decision about the federal funds rate, or sometimes between meetings if market conditions shift sharply. Rate changes usually take effect within a few days of the Fed's announcement.
You will not receive a notice before your rate drops. The bank is required to notify you of rate changes, but the notification often comes after the change takes effect. Check your account regularly if you want to stay aware of your current earnings.
If you want a may provide rate that does not change, a CD is your only option at Bank of America. You lock in a fixed APY for the term you choose, and that rate stays the same until maturity, even if the Fed cuts rates.
Frequently Asked Questions
Can I move money between my Bank of America checking and savings account without losing interest?
Yes. Transfers between your own Bank of America accounts do not affect your interest earnings. Interest is calculated on your daily balance, so moving money out reduces the balance that earns interest for that day forward, but it does not trigger a penalty or reset your interest clock.
What happens to my interest if I close my savings account?
You receive all interest earned up to the day you close the account. The bank calculates it based on your average daily balance for the month in which you close. You will see the final interest payment on your last statement or as a deposit to your checking account if you transfer the balance there.
Is my interest earnings taxable?
Yes. Interest earned in a savings account is taxable income. Bank of America will send you a Form 1099-INT at the end of the year if you earned $10 or more in interest. You report this on your tax return. This is one reason why very low interest rates matter less—the tax burden is minimal when you earn only a few dollars per year.
Do I pay taxes on interest before or after it is credited to my account?
You owe taxes on interest in the year you earn it, not in the year you withdraw it. The interest is taxable when it is credited to your account, even if you do not touch the money. Bank of America does not withhold taxes from interest earnings unless you request it.
Can I earn interest on a Bank of America savings account if I have a negative balance?
No. If your account balance is zero or negative, you earn no interest. You also may face overdraft fees. Keep a positive balance to earn interest and avoid fees.