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

Bank of America's regular savings account currently earns 0.01% annual percentage yield (APY) on balances under $100,000. Their Money Market account earns slightly more depending on your balance tier, but the highest rate Bank of America offers is still well below what other banks pay. If you want a savings account that actually earns meaningful interest, you will need to open an account at a different bank.

The gap matters. At a bank paying 4.5% APY, $10,000 earns $450 per year. At Bank of America's 0.01%, the same $10,000 earns $1. Over five years, that difference compounds to thousands of dollars. Bank of America's rates have not moved significantly even as other banks raised theirs in response to Federal Reserve rate increases.

Key Takeaways

  • Bank of America's savings accounts pay 0.01% APY, which is far below the 4% to 5% rates available at online banks and credit unions.
  • If you want to keep money at Bank of America, their Money Market account pays a slightly higher rate but still lags the market.
  • High-yield savings accounts are offered by online banks like Marcus, Ally, and American Express Personal Savings, as well as some credit unions and regional banks.
  • Opening a high-yield account elsewhere does not require closing your Bank of America account — you can keep both and move money between them.

Why Bank of America's rates are so low

Bank of America is a full-service bank with physical branches, ATMs, and customer service staff. Those costs are real. The bank passes some of that expense to customers through lower interest rates on deposits. Online-only banks like Ally or Marcus have no branches and no tellers, so they can afford to pay more.

Bank of America also makes money by lending out deposits at higher rates. The wider the gap between what they pay you and what they charge borrowers, the more profit they keep. When the Federal Reserve raised interest rates starting in 2022, many online banks passed those increases to savers when ready. Bank of America did not, because they did not have to — most customers stay for convenience, not yield.

Where to find high-yield savings accounts

Online banks consistently offer the highest rates. Marcus by Goldman Sachs, Ally Bank, and American Express Personal Savings all pay between 4% and 5% APY on regular savings accounts with no minimum balance and no monthly fees. These banks have no physical locations, so you manage everything by phone, website, or mobile app. Transfers to and from your Bank of America account take one to two business days.

Credit unions sometimes pay competitive rates on savings accounts, especially if you are a member. The rate varies by credit union and by how much you deposit. Some credit unions offer 5% or higher on balances up to $500 or $1,000, then a lower rate on anything above that. You can find credit unions in your area through CO-OP, a network that lets you use other credit unions' ATMs and branches.

A few regional banks also offer high-yield savings. Connexus Credit Union, Connexus Bank, and Vanguard Bank are examples, though rates and terms change frequently. The easiest way to compare current rates is to check Bankrate, DepositAccounts, or the Federal Deposit Insurance Corporation (FDIC) rate tracker, which update daily.

How to move money between Bank of America and a high-yield account

Once you open a high-yield account at another bank, you can link it to your Bank of America account and transfer money between them. Log into your Bank of America account online or in the mobile app, go to Transfers, and select "Transfer to another bank." You will need the routing number and account number of your high-yield account. Bank of America will verify the account by depositing two small amounts (usually under $1 each) and asking you to confirm them — this takes one to two business days.

After verification, you can transfer money in either direction. Outgoing transfers from Bank of America to another bank typically post within one business day. Incoming transfers to Bank of America from another bank may take one to three business days, depending on the other bank's processing speed. You can set up recurring transfers if you want to move money on a schedule — for example, $500 every payday.

If you prefer not to link accounts, you can also withdraw cash from Bank of America and deposit it at the other bank, or use a check. This is slower and less convenient, but it works if you want to keep your accounts completely separate.

What to consider when choosing a high-yield account

The interest rate matters, but it is not the only thing. Check whether the rate is promotional (good for a limited time) or ongoing. Some banks offer 5% APY for the first three months, then drop to 0.5%. Read the fine print to see how long the advertised rate lasts.

Confirm the account has no monthly maintenance fee and no minimum balance requirement. Some high-yield accounts charge $10 or $15 per month if your balance falls below a certain amount, which erases the interest you earn. The best accounts charge nothing.

Check whether the bank is FDIC-insured. The FDIC insures deposits up to $250,000 per depositor, per bank. If the bank fails, your money is protected up to that limit. Most online banks are FDIC-insured, but verify before you open an account. Credit unions are insured by the National Credit Union Administration (NCUA), which offers the same $250,000 protection.

Consider how you will access your money. High-yield savings accounts are meant for money you do not touch often — the whole point is to earn interest. If you need to withdraw frequently, the account still works, but you might be better off keeping spending money in a checking account and putting savings in the high-yield account.

The tax and reporting side

Interest you earn on a savings account is taxable income. At the end of each year, the bank will send you a Form 1099-INT showing how much interest you earned. You report this on your tax return. The higher the interest rate, the more you will owe in taxes — but you are still ahead, because you earned more money overall.

If you earn more than $10 in interest from a single bank in a year, the bank must send you a 1099-INT. If you earn less, they may not, but you still owe tax on it. Keep track of all interest earned across all accounts when you file.

Frequently Asked Questions

Can I keep my Bank of America account and open a high-yield account somewhere else?

Yes. You do not have to close your Bank of America account to open a high-yield account elsewhere. Many people keep a checking account at Bank of America for everyday spending and bill pay, then move savings to a high-yield account at another bank. The two accounts can be linked so you can transfer money between them easily.

How long does it take to open a high-yield savings account?

Most online banks let you open an account in 10 to 15 minutes using your computer or phone. You will need your Social Security number, a government ID, and a current address. The account is usually ready to use the same day, though transfers to and from other banks take one to three business days to process.

What if I need to withdraw my money quickly?

You can withdraw from a high-yield savings account at any time — there is no penalty or waiting period. The money will be in your Bank of America account within one to three business days if you transfer it, or you can visit a branch or ATM of the bank that holds the high-yield account if they have physical locations. Online-only banks have no branches, so you would need to transfer the money out.

Is my money safe in a high-yield account at a bank I have never heard of?

If the bank is FDIC-insured, your money is protected up to $250,000 even if the bank fails. Before you open an account, check the bank's FDIC insurance status on the FDIC website. Credit unions are insured by the NCUA with the same $250,000 limit. The size or age of the bank does not matter — the insurance does.

Do I have to keep a minimum balance in a high-yield account?

Most high-yield accounts have no minimum balance requirement. You can open an account with $1 and add money as you go. Some banks offer slightly higher rates if you maintain a larger balance, but the best accounts pay the advertised rate on any balance, no matter how small.