Bank of America savings accounts earn interest, but the rate changes and depends on which account you open
Bank of America pays interest on savings accounts through the Annual Percentage Yield (APY), which is the amount you earn on your balance over a year. The actual rate varies by account type and changes regularly based on Federal Reserve decisions. As of now, Bank of America's savings rates are lower than many online banks, typically ranging from 0.01% to 0.04% APY depending on the specific account and your balance, but you should check the current rates on their website or in a branch because these figures shift.
The interest you earn gets added to your account monthly. If you have $10,000 in a savings account earning 0.01% APY, you would earn roughly $1 per year, paid in small monthly deposits. The actual amount depends on your exact balance each day and the precise APY at the time the interest posts.
Key Takeaways
- Bank of America offers several savings account types, and each one has a different interest rate that changes based on Federal Reserve policy.
- Interest is calculated daily on your account balance and paid monthly, so higher balances earn more interest in dollar terms.
- Bank of America's rates are typically lower than online-only banks, so comparing options matters if interest earnings are important to you.
- You can see your current APY in your online banking dashboard or by calling customer service, and the rate you receive may depend on your account tier or balance level.
The three main Bank of America savings accounts and their rate structures
Bank of America offers the Regular Savings Account, the Money Market Savings Account, and the Premium Savings Account. Each one has a different APY, and the rates are not the same across all customers or all balances.
The Regular Savings Account is the basic option and typically has the lowest rate. The Money Market Savings Account usually offers a slightly higher rate in exchange for maintaining a higher minimum balance. The Premium Savings Account, available to customers with certain wealth management relationships, may offer a different rate structure entirely. You should check the current rates for each account type because they change independently of one another.
Bank of America also offers savings accounts linked to their checking products, and these sometimes have promotional rates for new customers, though these promotions are temporary and expire after a set period.
How daily balance and monthly compounding affect what you actually earn
Bank of America calculates interest using your daily balance, meaning they look at how much money you have in the account each day, add those daily balances together for the month, and divide by the number of days to get an average. Interest is then paid once per month based on that average balance and the stated APY.
This matters because deposits and withdrawals change your balance throughout the month. If you deposit $5,000 on the 15th of the month, that money only earns interest for the remaining days of that month. If you withdraw money, your balance drops and you earn less interest that month. The interest itself is not compounded daily at Bank of America—it posts once monthly, and then the next month's interest is calculated on your new balance plus the interest you just earned.
Over time, this monthly compounding means your interest earnings grow slightly faster than straightforward interest would suggest, but the effect is small at Bank of America's current rates. On a $10,000 balance earning 0.02% APY, the difference between monthly and daily compounding is less than a dollar per year.
Why Bank of America rates are lower than online banks
Bank of America operates physical branches in thousands of locations, maintains customer service phone lines, and pays for advertising and staff. Online-only banks like Marcus, Ally, and Discover have no branches and lower overhead costs, so they pass those savings to customers through higher interest rates. As of now, online savings accounts often pay 4% to 5% APY or higher, while Bank of America typically pays less than 0.05%.
The trade-off is convenience and access. If you use Bank of America for checking and want to keep everything in one place, the lower rate may be worth it to you. If you are saving money specifically to earn interest and do not need branch access, moving funds to an online savings account could earn you significantly more.
Bank of America's rates follow the Federal Reserve's benchmark rate, so when the Fed raises or lowers rates, Bank of America eventually adjusts its savings rates. However, they typically adjust downward faster than upward, meaning customers see rate cuts quickly but rate increases more slowly.
How to find your current APY and track interest earnings
You can see your current APY by logging into your Bank of America online banking account, going to your savings account details, and looking for the APY disclosure. It will show the rate that applies to your specific account. You can also call Bank of America customer service at 1-800-432-1000 and ask for your current rate, or visit a branch in person.
Bank of America shows interest earned in your account statement each month. The statement lists the interest deposit separately so you can see exactly how much you earned that month. If you want to track earnings over time, you can note the interest amount from each monthly statement and add them up, or use a spreadsheet to calculate projected earnings based on your balance and current APY.
Your APY may change without notice, so it is worth checking every few months if interest earnings matter to you. Bank of America will notify you of significant rate changes, but the notification may come after the change takes effect.
Comparing Bank of America savings to other options
If earning interest is a priority, you have several alternatives. Online savings accounts typically pay 10 to 100 times more interest than Bank of America at current rates. Money market accounts at other banks may offer higher rates while still providing check-writing or debit card access. Certificates of Deposit (CDs) lock your money away for a set period but pay higher rates in exchange.
Some people keep a small emergency fund at Bank of America for convenience and move larger savings amounts to higher-yielding accounts elsewhere. Others use Bank of America's savings account as a holding place while they decide where to move money long-term. There is no single right answer—it depends on whether you value the convenience of one institution over the extra interest you could earn.
Frequently Asked Questions
Does Bank of America charge fees that reduce my interest earnings?
Bank of America's basic savings accounts do not charge monthly maintenance fees if you maintain a minimum balance (usually $300 to $500, depending on the account type). If your balance falls below the minimum, a monthly fee applies, which would reduce your interest earnings. Check your specific account terms for the exact minimum and fee amount.
Can I move my savings to a higher-rate account without closing my Bank of America account?
Yes. You can open a savings account at another bank and transfer money there while keeping your Bank of America checking account open. You do not have to close anything. Many people maintain accounts at multiple banks for different purposes.
What happens to my interest if I withdraw money mid-month?
Interest is calculated on your average daily balance for the entire month, so a withdrawal mid-month reduces that average and lowers the interest you earn that month. The interest is still paid, but the amount is smaller because your balance was lower for part of the month.
Does Bank of America offer promotional interest rates for new savings accounts?
Bank of America occasionally runs promotions offering slightly higher rates for new savings accounts opened during a specific period, but these rates are temporary and expire after a set time (often three to six months). After the promotional period ends, your rate drops to the standard rate. Check their website or ask in a branch about current promotions.
How often does Bank of America change its savings rates?
Bank of America typically adjusts rates when the Federal Reserve changes its benchmark rate, but the timing is not automatic. Changes may happen within days or take weeks. You can check your current rate anytime in your online account or by calling customer service.