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Bank of America Savings and CD Rates: How They Compare to Better Options

By on September 28, 2022 0
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With 4,000 branches nationwide, not to mention more than 16,000 ATMs, you’re probably familiar with Bank of America.

It is one of the largest banks in the United States and offers services ranging from banking and loans to credit cards, investments, and more. If you’re looking for convenience and a range of banking options all in one place, Bank of America can be a solid choice.

But one place where that’s not enough is how much you can earn on the money you keep in your bank account. Like many large national banks, Bank of America offers very few savings products, including savings accounts and certificates of deposit (CDs).

For savers looking to maximize interest income as rates continue to rise, there are plenty of online and hybrid banking alternatives with high-yield accounts earning 100 times or more than Bank of America’s offerings.

Here’s an overview of the bank’s savings and CD rates, and more on what to consider for your savings today:

Bank of America Savings Rates by Account Type

Bank of America offers one primary online savings account option – a Bank of America Advantage Savings Account. Here is more information about the current interest rate, deposit and fees required for this account:

Annual Percentage Yield (APY) Minimum deposit Costs
Bank of America Advantage Savings Account 0.01% $100 $8 monthly service fee (can be waived when you meet specific requirements)

To waive the $8 fee, you must meet at least one of these requirements each monthly statement cycle:

  • Maintain a minimum balance of at least $500
  • Link your account to an eligible Bank of America Advantage Relationship Banking account
  • Be a member of Bank of America Preferred Rewards
  • Be under 18
  • Be a student under the age of 25

Fees are also waived for all new account holders for the first six months after account opening.

Earn more with favorite rewards

As with many of its accounts, Bank of America offers additional savings benefits to Preferred Rewards members. Not only can you avoid monthly fees, but you’ll get a higher return on deposits if you’re part of the Preferred Rewards program.

To join the program, you must maintain a certain balance in your Bank of America deposit accounts and/or Merrill investment accounts. There are three levels of preferred rewards, based on your total balance. Here’s how APY savings scale with tier:

Bank of America Overall account balance Annual Percentage Yield (APY)
Gold level $20,000 to 0.02%
Platinum level $50,000 to 0.03%
Platinum Honor Level $100,000 to 0.04%

How do Bank of America savings rates compare to those of other banks?

Bank of America’s interest rates on savings are comparable to those of other major physical banks in the country. However, they are far behind what you can find in online banks, hybrid banks, and even some small credit unions.

These rates are even lower than the national average determined by the Federal Deposit Insurance Corporation (FDIC), which is currently 0.17% APY.

Today, many high-yield savings accounts earn over 2% APY. If you have $1,000 in a savings account, that’s the difference between $0.10 in interest per year (at 0.01% APY) and $20 per year. Even the highest rates you can earn as a Preferred Rewards member are well below what many high-yield savings accounts offer – with little to no minimum deposit requirements.

Bank of America CD Rates by Type

Bank of America also offers Certificates of Deposit (CDs) with varying terms depending on your minimum deposit. The longer the term, the higher the minimum deposit required. As with savings, the interest you can earn on a Bank of America CD is limited.

For CD terms in the minimum deposit level of $1,000 or more, you will earn 0.03% APY. You can choose any CD duration, in monthly increments, between one month and 120 months.

CDs in the higher minimum deposit tier of $10,000 and longer available terms earn a slightly higher APY of 0.05%. The CD durations available are seven months, 10 months, 13 months, 25 months and 37 months.

Bank of America CD rates vs. other banks

Although Bank of America’s CD rates are better than its savings rates, they are still much lower than other CDs available today – and carry higher minimum deposits.

National averages for CDs according to the FDIC range from 0.07% APY for one month terms, 0.60% for 12 months and 0.74% for 60 months. But even those ranges are well below today’s high-yield CD rates. Many of the best CD rates among online or hybrid financial institutions are over 2% APY for shorter terms and over 3% APY for longer terms, with minimum deposit requirements as low as $0.

Is Bank of America a good choice for a savings account or a CD account?

Bank of America may be good for full banking services and breadth of locations, but you won’t get the best interest rates on your savings.

In fact, you can easily earn many multiples of Bank of America’s interest rates from a range of high-yield savings accounts and high-yield CD options. There are also other benefits, and more details to consider beyond just the interest rate.

For example, Bank of America’s monthly fees and minimum deposit requirements can end up being more expensive in the long run when you’re already earning very little interest. Many other savings and CD options have no fees and much smaller minimum deposit requirements or no requirements at all.

However, you should also remember that: If you have a savings goal or want to increase your emergency fund, the most important thing you can do is start saving and making regular contributions. Even the best interest rates are small compared to the difference you can make by building your balance over time, even if you only add a few dollars each month or each pay period.

But if you want the boost that a good interest rate can give, a high-yield savings account or CD may be the best option, especially today.