Earning interest on your savings at Bank of America, while possible, requires understanding their specific account structures and programs. Unlike some online-only banks that offer consistently high-yield savings accounts, Bank of America's interest rates on standard savings accounts are generally quite modest. However, there are ways to potentially maximize your earnings within their ecosystem.
Let's dive into a comprehensive guide on how to earn interest on your savings with Bank of America!
The Quest for Growth: Earning Interest on Your Bank of America Savings
Are you tired of your hard-earned money just sitting there, barely earning a few cents in interest? Do you want your savings to work harder for you, even within a traditional bank like Bank of America? Well, you've come to the right place! While Bank of America might not be known for its sky-high savings rates, there are definite strategies you can employ to get the most out of your deposits. This guide will walk you through the steps to understand, optimize, and grow your savings with Bank of America.
Step 1: Understand the Landscape: What Bank of America Offers
Before you can strategize, you need to know what you're working with. Bank of America primarily offers one main type of consumer savings account: the Advantage Savings account.
Sub-heading: The Advantage Savings Account
This is the standard savings option at Bank of America. It's designed for everyday savings and easy access to your funds. However, the interest rates on these accounts are typically very low. As of mid-2025, they often range from 0.01% to 0.04% Annual Percentage Yield (APY), with higher tiers offering slightly better rates. These rates are often tiered, meaning the more money you have in the account, the slightly higher your APY might be.
Sub-heading: Beyond Basic Savings: Certificates of Deposit (CDs)
Bank of America also offers Certificates of Deposit (CDs). These are a different beast entirely. With a CD, you agree to keep your money deposited for a fixed period (the "term"), and in return, you typically earn a higher, fixed interest rate than a regular savings account. The trade-off is that your money is less accessible; withdrawing it before the term ends usually incurs a penalty. CDs can be a good option for money you don't need immediate access to and want to grow at a more predictable rate.
Sub-heading: Exploring the Preferred Rewards Program
This is perhaps the most significant avenue for increasing your interest earnings at Bank of America. The Preferred Rewards program is designed to reward customers who maintain substantial combined balances across their Bank of America deposit accounts and Merrill investment accounts. The higher your combined balance, the higher your "tier," and the more benefits you unlock, including interest rate boosters on your savings accounts.
Step 2: Maximizing Your Advantage Savings Account
While the base rates are low, there are small optimizations you can make.
Sub-heading: Maintaining a Qualifying Balance
As mentioned, Bank of America's Advantage Savings accounts often have tiered interest rates. This means that if you maintain a higher balance, you might qualify for a slightly better APY within the Advantage Savings framework. Check their current rate sheet or speak to a representative to understand the specific balance tiers and their corresponding rates.
Sub-heading: Automatic Transfers: "Set It and Forget It" Savings
One of the best ways to build your savings, regardless of the interest rate, is to automate your contributions. Bank of America allows you to set up automatic transfers from your checking account to your savings account. This consistent saving habit ensures your money is always working for you, even if at a modest rate.
Sub-heading: The "Keep the Change" Program
Bank of America offers a program called "Keep the Change®." When you enroll, they round up your debit card purchases to the nearest dollar and transfer the difference from your checking account to your enrolled Bank of America savings account. While the individual amounts are small, they can add up over time, passively boosting your savings.
Step 3: Unlocking Higher Rates with Preferred Rewards
This is where you can see a more substantial difference in your interest earnings.
Sub-heading: Understanding Preferred Rewards Tiers and Requirements
The Preferred Rewards program has several tiers, each with increasing benefits:
- Gold Tier: Requires a 3-month combined average daily balance of $20,000 to $49,999 in qualifying Bank of America deposit accounts and/or Merrill investment accounts.
- Platinum Tier: Requires a 3-month combined average daily balance of $50,000 to $99,999.
- Platinum Honors Tier: Requires a 3-month combined average daily balance of $100,000 to $999,999.
- Diamond Tier: Requires a 3-month combined average daily balance of $1,000,000 to $9.99 million.
- Diamond Honors Tier: Requires a 3-month combined average daily balance of $10,000,000 and up.
Important Note: You need an eligible Bank of America personal checking account to qualify for Preferred Rewards.
Sub-heading: The Interest Rate Booster
A key benefit of Preferred Rewards is the savings interest rate booster. This means that your existing Advantage Savings account will earn a percentage increase on its base interest rate, depending on your tier:
- Gold Tier: 5% interest rate boost
- Platinum Tier: 10% interest rate boost
- Platinum Honors Tier: 20% interest rate boost
- Diamond/Diamond Honors Tier: 20% interest rate boost
For example, if your Advantage Savings account's base APY is 0.01%, and you are in the Platinum Honors tier (20% boost), your effective APY would become 0.012% (0.01% + 20% of 0.01%). While this is still not a high yield compared to some online banks, it's a definite improvement within Bank of America's offerings.
Sub-heading: Consolidating Your Assets
To reach higher Preferred Rewards tiers, consider consolidating your financial assets with Bank of America and Merrill. This could include:
- Checking Accounts: Maintain your primary checking account with BofA.
- Savings Accounts: Keep your savings in their Advantage Savings account.
- Investment Accounts: Consider opening a Merrill Lynch investment account (e.g., Merrill Guided Investing, self-directed brokerage).
- IRAs and CDs: Balances in these accounts also count towards your combined balance.
Remember, it's the combined average daily balance across these qualifying accounts that determines your tier.
Step 4: Considering Alternatives: Certificates of Deposit (CDs)
If your primary goal is to earn a higher, fixed interest rate and you don't need immediate access to your funds, Bank of America's CDs might be a better option than a standard savings account.
Sub-heading: Fixed Term CDs
Bank of America offers various Fixed Term CDs with different maturities (e.g., 3 months, 6 months, 1 year, 2 years, 5 years, etc.). Generally, longer terms tend to offer higher interest rates, though this can fluctuate with market conditions. The interest rate is fixed for the entire term, providing predictability.
Sub-heading: Flexible CDs
They may also offer "Flexible CDs" which could have slightly different terms or early withdrawal options, though typically with some penalty. Always read the fine print!
Sub-heading: CD Ladders
To balance higher interest rates with some liquidity, consider a CD ladder. This involves dividing your savings into several CDs with staggered maturity dates. For example, if you have $10,000, you could put $2,000 into a 1-year CD, $2,000 into a 2-year CD, and so on. As each CD matures, you can reinvest it into a new, longer-term CD, or use the funds if needed. This strategy ensures a portion of your money becomes available at regular intervals while still earning better rates than a standard savings account.
Step 5: Continuous Monitoring and Optimization
Earning the most interest isn't a one-time setup; it requires ongoing attention.
Sub-heading: Regularly Reviewing Your Rates
Bank of America's interest rates, like those of all banks, can change with market conditions. It's a good practice to regularly check their current interest rates for savings accounts and CDs. You can usually find this information on their website or by asking a financial center associate.
Sub-heading: Re-evaluating Your Preferred Rewards Tier
Your combined balance might fluctuate. Bank of America reviews your balances monthly to determine if you qualify for a higher tier. If your balances grow, you'll automatically move up, unlocking better benefits, including improved interest rate boosters. Keep an eye on your combined balance to ensure you're in the highest possible tier.
Sub-heading: Considering External High-Yield Options
While this guide focuses on Bank of America, it's important to acknowledge that online-only banks often offer significantly higher interest rates on their savings accounts compared to traditional brick-and-mortar banks like Bank of America. If your primary goal is maximizing interest and you don't require physical branch access, exploring high-yield savings accounts at other institutions might be a very beneficial strategy for a portion of your savings. Many people use a combination of a traditional bank for everyday banking and an online high-yield savings account for their long-term savings.
Frequently Asked Questions (FAQs)
How to check my current Bank of America savings interest rate?
You can check your current interest rate by logging into your Bank of America online banking account, reviewing your monthly statements, or contacting customer service.
How to qualify for Bank of America Preferred Rewards?
To qualify for Preferred Rewards, you need an eligible Bank of America personal checking account and a three-month combined average daily balance of $20,000 or more across your qualifying Bank of America deposit accounts and Merrill investment accounts.
How to open a Certificate of Deposit (CD) with Bank of America?
You can open a CD with Bank of America online, through their mobile app, or by visiting a financial center. You'll typically need a minimum opening deposit.
How to avoid monthly fees on a Bank of America savings account?
To avoid monthly fees on an Advantage Savings account, you generally need to maintain a minimum daily balance, set up qualifying automatic transfers, or be enrolled in Preferred Rewards. Check their current fee schedule for specific requirements.
How to transfer money to my Bank of America savings account?
You can transfer money to your Bank of America savings account through online banking, the mobile app, by setting up recurring automatic transfers, or by depositing cash or checks at an ATM or financial center.
How to know if "Keep the Change" is active on my account?
You can check if "Keep the Change" is active by logging into your online banking or mobile app and looking for the program enrollment status. You can usually enroll or unenroll there as well.
How to compare Bank of America's interest rates to other banks?
You can compare Bank of America's rates to other banks by visiting financial comparison websites (like Bankrate, NerdWallet, or Investopedia) that regularly update interest rates for various banks and account types.
How to maximize interest on a small savings balance at Bank of America?
For small balances, the interest earned will be minimal due to low base rates. Your best bet is to consistently add to your savings through automatic transfers and enroll in the "Keep the Change" program to build your balance over time, aiming to qualify for Preferred Rewards.
How to contact Bank of America customer service about savings accounts?
You can contact Bank of America customer service by calling their toll-free number (usually found on their website or your statements), using the secure message feature in online banking, or visiting a local financial center.
How to decide if a CD or a savings account is better for me at Bank of America?
Choose a CD if you have money you won't need for a fixed period (e.g., 6 months to 5 years) and want a predictable, typically higher interest rate. Choose a savings account if you need easy access to your funds and prioritize liquidity over maximizing interest, or if you qualify for Preferred Rewards.