You've probably heard of Bank of America, which has more than 16,000 ATMs and 4,000 branches around the country. As one of the country's leading financial institutions, it provides a full spectrum of banking, lending, credit card, and investment options.
Bank of America is a great option if you want a wide variety of banking services in one convenient location. However, it needs to catch up compared to other options regarding the interest rate on savings. Bank of America, like many other majors national banks, has limited savings product offerings, including savings accounts and CDs.
Several online and hybrid banking options with high-yield accounts yielding 100x or more than what Bank of America provides for savers wishing to maximize interest returns as rates continue to increase.
Variations In Interest Rates for Savings Accounts at Bank of America
Bank of America's primary savings account product available online is called Bank of America Advantage Savings. To avoid paying the $8 charge each billing cycle, you must fulfill one of the following criteria:
- Keep at least $500 in your account at all times.
- Connect to a Bank of America Advantage Relationship Banking account.
- Sign up for Bank of America's Preferred Rewards program.
- Not be older than 18
- Be under 25 and a student.
Preferred Rewards Boost Earnings
Preferred Rewards account holders at Bank of America enjoy several additional savings benefits similar to those available to account holders of other Bank of America products.
Members of the Preferred Rewards program not only do not pay a monthly fee but also receive a greater interest rate on their deposits. You can qualify for the program by keeping a minimum amount in either a Bank of America deposit or a Merrill Lynch investment account.
There are three stages of Preferred Rewards, each of which is determined by the total amount of your account.
To What Extent Does Bank of America Offer Competitive Savings Rates?
Savings interest rates at Bank of America are competitive with those of other majors, physically present financial institutions in the United States. In contrast, internet banks, hybrid banks, and even some smaller credit unions provide better services and features.
These rates are significantly lower than the current national average calculated by the Federal Deposit Insurance Corporation (FDIC), which stands at 0.17% APY.
Many current high-yield savings accounts pay out more than 2% annual percentage yield (APY). There is a huge disparity between earning $0.10 per year on $1,000 in a savings account and $20 per year in interest.
Variations In Bank of America Certificate of Deposit Interest Rates
Bank of America also allows you to open a certificate of deposit (CD) with a minimum deposit and a range of periods to suit your needs. The larger the minimum deposit is, the longer the duration.
The interest you may receive on a Bank of America CD is capped, just like it is with savings. The APY for CD periods with a minimum deposit of $1,000 is 0.03%. A certificate of deposit period can be selected between one month and 120 months in one-month increments.
CDs with a greater minimum deposit of $10,000 receive a slightly better APY of 0.05% because of the longer durations offered. Available CD maturities range from 7 months to 37 months.
Compared To Other Banks, Bank of America's CD Rates
CD rates at Bank of America are greater than their savings rates, but they still lag behind the competition and require a larger initial investment. The Federal Deposit Insurance Corporation reports that the national average yield on certificates of deposit is 0.07% for 1-month CDs, and 0.74% for 60-month CDs.
However, even the upper bounds of those estimates are far lower than today's highest-yield CD rates. With a minimum deposit of zero dollars, some of the finest CD rates may be found at online or hybrid financial institutions.
Is Bank of America a Good Savings/CD Account?
Bank of America has a lot of branches and offers a wide variety of services, but its savings accounts have a lower return on investment. While Bank of America offers competitive interest rates, several high-yield savings accounts and certificate of deposit alternatives may easily earn several times as much.
Interest rate isn't the only factor; additional advantages and considerations exist. For instance, Bank of America's monthly fees and minimum deposit requirements might add up over time if you are only making little interest on your deposits.
There are a lot of other savings and CD choices out there that don't charge any fees and have far lower minimum deposit requirements if any at all.
