Bank of America is one of the largest banks in the United States

Bank of America (often called BofA) is a national bank that holds money, lends money, and offers investment services to millions of people and businesses. It operates thousands of branches across the country and online. When you open an account there, you're banking with one of the four largest banks in the US by total assets.

The bank makes money the same way most banks do: it takes deposits from customers like you, pays you a small amount of interest on that money, then lends that money to other customers at a higher interest rate. The difference between what it pays you and what it charges borrowers is its profit. Bank of America also charges monthly fees on some accounts, sells investment products, and makes money when you use credit cards it issues.

If you're new to banking or returning after a gap, Bank of America is one option among many. It's not the only bank, and it's not necessarily the right choice for everyone. Understanding what it actually does — and what it doesn't — helps you decide whether to bank there.

Key Takeaways

  • Bank of America is a for-profit company that holds your deposits, lends money to borrowers, and charges fees for services.
  • You can open a checking or savings account online or in person, and the bank insures deposits up to $250,000 through the FDIC.
  • The bank makes money partly from fees on accounts, so comparing its fee structure to other banks before opening an account matters.
  • Bank of America is not a government agency and does not run benefit programs, though it does partner with some government services like direct deposit for Social Security.

The types of accounts Bank of America offers

Bank of America offers checking accounts (for everyday spending and bill payments), savings accounts (for money you want to keep separate and earn interest on), and money market accounts (a hybrid that pays higher interest but limits how often you can withdraw). Each account type has different rules about how many times you can withdraw money per month and what the minimum balance needs to be.

The bank also offers certificates of deposit (CDs), which are accounts where you agree to leave money untouched for a set period — three months, one year, five years — in exchange for a may provide interest rate. If you withdraw the money early, you pay a penalty. CDs are useful if you have money you won't need for a while and want a may provide return.

Beyond deposit accounts, Bank of America issues credit cards, provides mortgages and auto loans, manages investment accounts, and offers wealth management services for people with large amounts of money to invest. For the purposes of this guide, we're focusing on the basic deposit accounts most people use when they're new to banking.

How Bank of America protects your money

When you deposit money at Bank of America, the Federal Deposit Insurance Corporation (FDIC) insures it. The FDIC is a government agency that guarantees your deposits up to $250,000 per account type, per person, per bank. This means if Bank of America fails — which is extremely rare — the government will reimburse you up to that limit.

This protection applies to checking accounts, savings accounts, and money market accounts. It does not explore to investment accounts, stocks, or bonds held at the bank. The $250,000 limit is per account type, so if you have both a checking account and a savings account at Bank of America, each is insured separately up to $250,000.

Bank of America also uses encryption and security protocols to protect your account from fraud. If someone uses your debit card or account number without permission, you can report it and the bank will investigate. Your liability for unauthorized charges is limited by federal law, though the exact amount depends on how quickly you report the fraud.

What fees Bank of America charges

Bank of America charges a monthly maintenance fee on most checking and savings accounts, though the fee is waived if you meet certain conditions — usually maintaining a minimum balance or setting up direct deposit. The fee amounts vary by account type and change over time, so you should check the bank's current fee schedule before opening an account.

Beyond monthly fees, the bank charges fees for specific actions: overdraft fees if you spend more than you have in your account, ATM fees if you use an out-of-network ATM, wire transfer fees, and fees for closing an account within a certain timeframe. Some of these fees can add up quickly if you're not aware of them.

This is why comparing Bank of America's fees to other banks matters. Some banks charge no monthly fee. Some charge no overdraft fees. Some reimburse ATM fees. If you're on a tight budget, a bank with lower fees might save you money over time, even if it's less well-known than Bank of America.

How to open a Bank of America account

You can open a checking or savings account online at bankofamerica.com or in person at a branch. Online, you'll need a valid government ID, a Social Security number or Individual Taxpayer Identification Number (ITIN), and an initial deposit (the amount varies by account type). The process usually takes 10 to 15 minutes.

In person, you'll bring the same documents to a branch, speak with a banker, and complete the paperwork. The banker can answer questions about which account type fits your needs and explain the fee structure. Some people prefer this route because they can ask questions in real time.

Once your account is open, you'll receive a debit card (usually within 7 to 10 business days), checks if you requested them, and online access to your account. You can then deposit money by transferring it from another bank, depositing a check through the mobile app, or depositing cash at a branch or ATM.

Bank of America versus other banks

Bank of America is large and has many branches, which is convenient if you prefer in-person banking. But size comes with higher fees than some smaller banks or online-only banks charge. If you rarely visit a branch and are comfortable banking online, a smaller bank or online bank might offer lower fees and higher interest rates on savings.

There is no single "best" bank. The right choice depends on your habits: Do you need a physical branch nearby? Do you want the lowest fees possible? Do you want the highest interest rate on savings? Do you need customer service you can reach by phone? Different banks excel at different things, and Bank of America is a reasonable choice for some people and not the best choice for others.

Before opening an account anywhere, spend 10 minutes comparing fee schedules and interest rates. A bank that charges $15 a month in fees costs you $180 a year. A savings account that pays 0.01% interest versus 4% interest makes a real difference if you're saving money. These small differences compound over time.

What Bank of America is not

Bank of America is not a government agency. It does not run benefit programs, distribute government payments, or determine who is may be able to access for information. It is a private, for-profit company owned by shareholders.

That said, Bank of America does partner with government programs. For example, if you receive Social Security, you can have your payment deposited directly into a Bank of America account. If you receive unemployment benefits in certain states, you may receive them on a debit card issued by Bank of America. But the bank is not the source of these benefits — it is straightforward the institution holding or delivering the money.

Bank of America also does not offer financial information for free. If you want help managing investments or planning for retirement, the bank's advisors will help you, but they typically charge fees or work on commission. This is different from the free educational information you're reading now.

Frequently Asked Questions

Is my money safe at Bank of America?

Yes, up to $250,000 per account type. The FDIC insures deposits at Bank of America the same way it insures deposits at any other bank. If you have more than $250,000, you can spread it across multiple account types or multiple banks to keep all of it insured.

What's the difference between a checking account and a savings account?

A checking account is for frequent spending — you get a debit card and checks, and there are no limits on how many times you withdraw. A savings account is for money you want to keep separate and earn interest on; it typically limits withdrawals to a certain number per month. Most people have both.

Does Bank of America charge interest on savings accounts?

Yes, but the rate is usually very low — often less than 0.05% per year. This means if you have $1,000 in savings, you might earn less than 50 cents in a year. Online banks and credit unions sometimes offer higher rates. Check the current rate before opening an account.

Can I use Bank of America ATMs for free?

Yes, if you use Bank of America's own ATMs. If you use an ATM from another bank, Bank of America charges a fee (usually $2 to $3). Some checking accounts waive out-of-network ATM fees; check the account details before opening.

What happens if I overdraft my account?

If you spend more money than you have, Bank of America will cover the transaction but charge you an overdraft fee (typically $35). If you overdraft multiple times in one day, you may be charged multiple fees. You can set up overdraft protection to link your checking account to a savings account so transfers happen automatically instead.