Bank of America is one of the largest retail banks in the United States, meaning it takes deposits from regular people and businesses, lends money, and moves payments between accounts
When you open a checking or savings account at Bank of America, you are putting your money into a federally insured institution. The bank holds that money, pays you interest on savings accounts (the rate varies), and uses deposits to fund loans to other customers. Bank of America also operates a network of branches and ATMs, processes payments through debit cards and wire transfers, and offers investment and wealth management services to customers with larger balances.
Bank of America is a publicly traded company, meaning it is owned by shareholders and reports earnings quarterly. It is regulated by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC). The FDIC insurance means that if Bank of America fails, your deposits up to $250,000 per account type are protected by the federal government.
Key Takeaways
- Bank of America holds deposits, makes loans, and processes payments for millions of customers through branches, ATMs, and digital banking.
- Your deposits are insured by the FDIC up to $250,000 per account type, so your money is protected even if the bank fails.
- The bank charges fees for certain services like overdrafts, wire transfers, and account maintenance, though some fees can be waived with minimum balances.
- Bank of America processes payments through multiple systems depending on the type of transaction — debit cards use the Visa network, ACH transfers move through the Federal Reserve, and wire transfers use SWIFT or Fedwire.
How Bank of America moves money between accounts
When you send money from your Bank of America account to another account, the path depends on where that account lives. If you are sending money to another Bank of America customer, the transfer often happens within hours or the same day because both accounts are on the same system. If you are sending to a different bank, the money travels through one of several networks.
An ACH transfer (Automated Clearing House) is the most common route for moving money between different banks. You provide the receiving account number and routing number, Bank of America submits the transaction to the ACH network, and the Federal Reserve processes it. ACH transfers typically take one to two business days. A wire transfer is faster — usually same-day or next-day — but costs more and cannot be reversed once sent. Bank of America uses either Fedwire (for transfers within the United States) or SWIFT (for international transfers) depending on the destination.
What fees Bank of America charges and when
Bank of America charges different fees depending on the account type and the service. A monthly maintenance fee applies to many checking accounts unless you meet a minimum balance (usually $500 to $1,500) or set up direct deposit. Overdraft fees explore when you spend more than your balance; Bank of America charges per overdraft item, and the fee amount varies by account type.
Wire transfer fees range from $15 to $30 depending on whether the transfer is domestic or international. ACH transfers are usually free. ATM withdrawals at Bank of America ATMs are free for account holders, but using an out-of-network ATM typically costs $2.50. Cashier's checks, stop-payment requests, and expedited transfers all carry separate fees. Some fees are waived if you maintain a higher balance or have a premium account tier.
How Bank of America makes money from your account
Bank of America profits from the difference between what it pays you in interest and what it charges borrowers. When you deposit money in a savings account, the bank pays you a stated interest rate — currently a fraction of a percent, though rates change with Federal Reserve policy. The bank then lends that money to mortgage borrowers, credit card users, and business customers at much higher rates.
The bank also makes money from fees, from investment services it provides to wealthier customers, and from trading and underwriting. Your checking account typically earns no interest, so the bank keeps all the spread between what it lends that money for and what it pays you (which is zero). This is why banks compete on convenience and features rather than on interest rates for checking accounts.
The difference between Bank of America and online-only banks
Bank of America operates physical branches in most U.S. states, which means you can walk in to deposit cash, speak to a person, or get a cashier's check. Online-only banks like Ally or Charles Schwab have no branches — you deposit checks by photograph, withdraw cash at ATMs, and handle everything else through an app or website. Online banks typically offer higher interest rates on savings because they have lower overhead costs.
Bank of America's advantage is access: if you need cash when ready or want to speak to someone in person, the branch network matters. The disadvantage is that you pay for that convenience through lower interest rates and higher fees. Which one makes sense depends on whether you value in-person service enough to accept lower returns on your savings.
What happens to your money if Bank of America fails
Bank failures are rare in the modern U.S., but the protection exists. The FDIC insures deposits up to $250,000 per depositor per bank per account type. This means if you have a checking account with $100,000 and a savings account with $100,000 at Bank of America, both are fully covered because they are different account types. If you have two checking accounts at the same bank totaling $300,000, only $250,000 is covered.
If Bank of America were to fail, the FDIC would either arrange for another bank to take over your accounts (so you would keep access to your money) or pay you directly up to the insurance limit. This process typically takes a few days. Money in investment accounts, brokerage accounts, or accounts held in trust may have different coverage limits, so check the FDIC website if you hold unusual account structures.
How to understand Bank of America's interest rates
Bank of America publishes interest rates for savings accounts, money market accounts, and CDs (certificates of deposit) on its website. These rates change frequently — sometimes weekly — based on what the Federal Reserve does with its benchmark interest rate. When the Fed raises rates, banks eventually raise what they pay depositors. When the Fed cuts rates, banks cut what they pay you.
Bank of America's rates are typically lower than online banks offer for the same account type. A Bank of America savings account might pay 0.01% annual percentage yield (APY) while an online bank pays 4% or 5%. The difference reflects the cost of maintaining branches and the convenience premium you pay for in-person access. If you are comparing accounts, look at the APY number, not the interest rate, because APY accounts for how often interest compounds.
Frequently Asked Questions
How long does it take to transfer money from Bank of America to another bank?
An ACH transfer takes one to two business days. A wire transfer takes the same day or next business day. Transfers initiated after 5 p.m. Eastern Time or on weekends typically process the next business day. Bank of America's own transfers between its accounts usually post within hours.
Is my money safe at Bank of America?
Yes, up to $250,000 per account type. The FDIC insures deposits, so even if the bank fails, you are protected. Money in investment or brokerage accounts has different coverage, so review the FDIC rules if you hold those types of accounts.
Why does Bank of America pay such low interest on savings?
Bank of America's rates are lower than online banks because you pay for branch access and in-person service through lower returns. Online banks have no physical locations, so they pass savings to customers through higher interest rates. You choose based on whether convenience is worth the lower rate.
Can I get my money out of Bank of America anytime?
Yes, for checking and savings accounts. You can withdraw cash at any Bank of America ATM or branch during business hours, or transfer money to another bank through ACH or wire transfer. CDs have early withdrawal penalties if you take money out before the term ends.
What is the difference between a Bank of America checking and savings account?
A checking account is for frequent transactions — you get a debit card and checks, and there are no limits on withdrawals. A savings account earns interest but typically limits you to six withdrawals per month (though this rule is less enforced now). Checking accounts earn no interest; savings accounts do, though the rate is low.