How much interest does a Bank of America savings account earn? This is a question many people ask when considering where to stash their hard-earned money. The short answer is: not a lot, especially compared to many other options available today. However, the full picture is a bit more nuanced, involving different account types and factors that can slightly influence your earnings.
Let's dive in and unravel the mystery of Bank of America's savings account interest, and more importantly, how you can potentially make your money work harder for you!
Step 1: Are You Ready to Uncover the Truth About Your Savings?
Before we delve into the nitty-gritty, ask yourself: Are you satisfied with how much your current savings are growing? If you're like most people with a traditional savings account at a large brick-and-mortar bank, the answer might be a resounding "no." It's crucial to understand that not all savings accounts are created equal when it comes to earning interest. Let's explore what Bank of America offers and then see how it stacks up.
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| How Much Interest Does A Bank Of America Savings Account Earn |
Step 2: Understanding Bank of America's Core Savings Account
Bank of America primarily offers one main savings account for individuals: the Bank of America Advantage Savings account.
Sub-heading: The Standard APY – A Glimpse into Modest Returns
For most customers, the Bank of America Advantage Savings account earns a very low Annual Percentage Yield (APY). As of mid-2025, this standard APY is typically around 0.01%.
- What does 0.01% APY actually mean? It means for every $10,000 you have in your savings account, you'd earn a mere $1 in interest over an entire year. To put it into perspective, a single cup of coffee probably costs more than that! This rate is significantly below the national average for savings accounts, and far, far below what high-yield savings accounts offer.
Sub-heading: Monthly Service Fees – The Hidden Cost
Adding to the challenge of earning meaningful interest, the Bank of America Advantage Savings account often comes with a monthly service fee, which is currently around $8. This fee can quickly erode any minimal interest you might earn.
- How to avoid the monthly fee: Bank of America does offer ways to waive this fee, such as:
- Maintaining a minimum daily balance (typically $500 or more).
- Linking your savings account to a qualifying Bank of America checking account.
- Being under a certain age (e.g., under 25).
- Being enrolled in the Bank of America Preferred Rewards program (more on this below).
Step 3: Boosting Your Earnings with Preferred Rewards
This is where things get slightly better, but still fall short of what many online banks offer. Bank of America has a program called Preferred Rewards that can offer a slightly higher APY on your Advantage Savings account, along with other banking benefits.
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Sub-heading: Preferred Rewards Tiers and Their Impact
To qualify for Preferred Rewards, you need to have a combined average daily balance across your eligible Bank of America banking and Merrill investment accounts. The higher your combined balance, the higher your Preferred Rewards tier, and consequently, the slightly higher interest rate you might earn on your Advantage Savings account.
Here's a general idea of the tiers and their potential APYs on Advantage Savings:
- Gold Tier: Requires a combined balance of $20,000 to less than $50,000. You might see an APY of around 0.02%.
- Platinum Tier: Requires a combined balance of $50,000 to less than $100,000. The APY could be around 0.03%.
- Platinum Honors Tier: Requires a combined balance of $100,000 to less than $1 million. This tier might offer the highest APY for Advantage Savings, typically around 0.04%.
It's crucial to remember that these are still exceptionally low rates compared to what high-yield savings accounts at online banks offer. Even at the Platinum Honors tier, your money isn't growing significantly.
Step 4: Exploring Other Bank of America Savings Options (Beyond the Standard)
While the Advantage Savings account is the primary offering, Bank of America also provides other ways to save money, though these aren't typically considered traditional "savings accounts" in the same vein.
Sub-heading: Certificates of Deposit (CDs) – Locking in Rates
Bank of America offers Certificates of Deposit (CDs), which typically offer higher interest rates than their standard savings accounts. With a CD, you agree to deposit a sum of money for a fixed period (e.g., 6 months, 1 year, 5 years) and in return, you get a fixed interest rate.
- Key considerations for CDs:
- Higher Rates: CD rates at Bank of America can vary, but generally, they will be higher than the Advantage Savings APY, especially for longer terms. Some promotional CDs might even offer more competitive rates.
- Limited Access: The major drawback is that your money is locked in for the term. Early withdrawals usually incur a penalty, which can eat into your principal.
- Minimum Deposit: CDs often require a higher minimum deposit to open, sometimes $1,000 or more.
Sub-heading: Individual Retirement Accounts (IRAs) – Long-Term Savings
Bank of America also offers Individual Retirement Accounts (IRAs), which are designed for long-term retirement savings and offer tax advantages. While you can hold various investments within an IRA, including cash, they are not primarily designed as everyday savings accounts for liquidity.
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Step 5: Is Bank of America the Best Place for Your Savings? A Critical Comparison
Now that you understand the interest earnings at Bank of America, let's address the elephant in the room: is it the optimal place for your savings if your goal is to grow your money?
The answer, for most people focused on maximizing interest, is no.
Sub-heading: The Rise of High-Yield Savings Accounts (HYSAs)
Many online-only banks and some credit unions offer High-Yield Savings Accounts (HYSAs) that provide significantly higher interest rates than traditional brick-and-mortar banks like Bank of America. It's not uncommon to find HYSAs with APYs of 4.00% or even higher in the current market (as of mid-2025).
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Consider the difference: If you have $10,000 in a Bank of America Advantage Savings account earning 0.01% APY, you'd get $1 per year. The same $10,000 in a HYSA earning 4.00% APY would yield approximately $400 in interest per year. That's a substantial difference!
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Why the difference? Online banks typically have lower overhead costs (no physical branches) and can pass those savings on to their customers in the form of higher interest rates.
Step 6: Making Your Money Work Harder: A Step-by-Step Guide to Maximizing Earnings
If you're looking to earn more interest on your savings, here's a step-by-step guide to help you:
Sub-heading: Step 6.1: Assess Your Current Savings Goals and Needs
- Emergency Fund: How much do you need for unexpected expenses? This money should be readily accessible.
- Short-Term Goals: Saving for a down payment, a vacation, or a new car?
- Long-Term Goals: Retirement, college savings? These might involve different investment vehicles.
Sub-heading: Step 6.2: Research High-Yield Savings Accounts
- Compare APYs: Look for banks offering the highest Annual Percentage Yields. Websites like Bankrate, NerdWallet, and others frequently update lists of the best HYSAs.
- Check for Fees and Minimums: Many HYSAs have no monthly fees and low or no minimum balance requirements.
- FDIC Insurance: Always ensure the bank is FDIC-insured (up to $250,000 per depositor) to protect your deposits.
- Accessibility: How easy is it to transfer money in and out? Most online HYSAs offer electronic transfers, but consider the transfer times.
Sub-heading: Step 6.3: Consider Other High-Interest Alternatives
Depending on your financial goals and risk tolerance, you might also explore:
- Money Market Accounts (MMAs): These can offer slightly higher rates than traditional savings accounts and sometimes come with limited check-writing privileges. Rates can be variable.
- Certificates of Deposit (CDs): If you have money you won't need for a specific period, CDs can offer guaranteed returns, especially in a rising interest rate environment. Consider a "CD ladder" to maintain some liquidity.
- Short-Term Bonds or Money Market Funds: For slightly more sophisticated savers, these can offer better returns than traditional savings, but come with different risk profiles. Consult a financial advisor for investment advice.
Sub-heading: Step 6.4: Set Up Automatic Transfers
Once you choose a higher-yielding account, automate your savings! Set up recurring transfers from your checking account to your savings account. This "set it and forget it" approach is incredibly effective for consistent savings.
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Sub-heading: Step 6.5: Regularly Review and Adjust
Interest rates can fluctuate, and new, more competitive accounts may emerge. Make it a habit to review your savings accounts and interest rates at least once a year. If you find a better option, don't hesitate to switch! The process of opening a new online savings account and transferring funds is often simpler than you think.
10 Related FAQ Questions
Here are 10 frequently asked questions about Bank of America savings accounts and related topics, with quick answers:
How to find the current Bank of America savings account interest rates? You can find the most current Bank of America interest rates by visiting their official website (usually under "Bank Account Interest Rates" or similar), or by contacting customer service directly.
How to open a Bank of America Advantage Savings account? You can open a Bank of America Advantage Savings account online, through their mobile app, or by visiting a Bank of America financial center. You'll typically need to provide personal identification and an initial deposit.
How to avoid monthly fees on a Bank of America savings account? To avoid monthly fees, you can maintain a minimum daily balance (e.g., $500), link to a qualifying Bank of America checking account, be under age 25, or be enrolled in the Preferred Rewards program.
How to earn more interest than Bank of America offers? To earn significantly more interest, consider opening a high-yield savings account (HYSA) at an online-only bank, or explore other options like Certificates of Deposit (CDs) or Money Market Accounts (MMAs) from institutions offering competitive rates.
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How to tell if my Bank of America savings account is earning interest? You can check your monthly bank statements, log in to your online banking portal, or use the Bank of America mobile app to view your interest earnings and current APY.
How to transfer money from a Bank of America checking to savings account? You can easily transfer money between your linked Bank of America checking and savings accounts through online banking, the mobile app, at an ATM, or by speaking with a teller at a financial center.
How to qualify for Bank of America Preferred Rewards? You qualify for Preferred Rewards by maintaining a combined average daily balance across your eligible Bank of America banking and Merrill investment accounts. There are different tiers based on the balance amount.
How to close a Bank of America savings account? You can close a Bank of America savings account by visiting a financial center, calling customer service, or sometimes by sending a written request. Ensure your balance is zero before closing.
How to know if a savings account is FDIC insured? Most legitimate banks in the U.S., including Bank of America, are FDIC insured. You can verify this by looking for the FDIC logo on their website or asking a bank representative. This protects your deposits up to $250,000 per depositor, per insured bank, for each ownership category.
How to compare different high-yield savings accounts effectively? When comparing HYSAs, look at the Annual Percentage Yield (APY), any monthly fees or minimum balance requirements, accessibility of funds, and customer service reviews. Prioritize APY and low fees if your primary goal is maximizing interest.
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