Bank of America does not offer a high-yield savings account

Bank of America's standard savings account earns interest, but the rate is significantly lower than what you will find at online banks or credit unions. As of now, Bank of America's savings accounts pay rates well below 1% annually, while high-yield savings accounts at other institutions commonly pay 4% to 5% or higher.

If you keep money at Bank of America primarily for checking and bill pay, a savings account there may be convenient. But if your goal is to earn meaningful interest on money you are setting aside, Bank of America is not the right place for that money. Moving savings to another institution takes about 15 minutes and costs nothing.

Key Takeaways

  • Bank of America savings accounts pay less than 0.5% annual interest, making them unsuitable for high-yield savings goals.
  • Online banks and credit unions offer rates four to ten times higher on savings accounts with the same FDIC protection.
  • You can keep your Bank of America checking account and move only your savings to a higher-paying institution.
  • Switching takes one phone call to your new bank and one transfer instruction to move money between accounts.

Why Bank of America's rates lag behind competitors

Large brick-and-mortar banks like Bank of America have higher overhead costs—they maintain physical branches, employ tellers, and run call centers. Those costs come out of the interest they can afford to pay depositors. Online banks have no branches and minimal staff, so they pass the savings to customers in the form of higher rates.

Bank of America also relies on customer inertia. Many people keep savings there simply because they already have a checking account there, even if the rate is poor. The bank has little incentive to raise rates when customers are not shopping around.

What Bank of America savings accounts actually pay

Bank of America offers several savings products: the regular Savings Account, the Money Market Account, and CDs (certificates of deposit). The regular Savings Account typically pays between 0.01% and 0.04% annually, depending on your balance. The Money Market Account pays slightly more but still under 0.5%. CDs pay a bit higher but lock your money away for a set term.

These rates change periodically, so the exact figure you see today may differ from next month. The point is not the precise number—it is that Bank of America's rates are consistently among the lowest in the industry. If you have $10,000 in a Bank of America savings account earning 0.04%, you earn $4 per year. The same $10,000 at a 4.5% high-yield account earns $450 per year.

Where to move your savings instead

Online banks like Marcus (owned by Goldman Sachs), Ally Bank, American Express Personal Savings, and Discover Bank all offer high-yield savings accounts with rates currently in the 4% to 5% range. Credit unions often offer competitive rates as well, and some have no monthly fees. All of these accounts carry the same FDIC insurance protection as Bank of America—your money is insured up to $250,000 per account.

You do not need to choose between convenience and rate. Many people keep a checking account at Bank of America for bill pay and debit card use, then keep savings at an online bank or credit union. Money transfers between institutions take one to three business days, which is fast enough for true emergency savings.

How to move money from Bank of America to a higher-rate account

First, open an account at the institution where you want to move your savings. This takes 10 to 15 minutes online and requires your Social Security number, address, and a valid ID. You will be assigned an account number immediately.

Next, log into your Bank of America account and initiate an external transfer to your new account. You will need the routing number and account number of your new bank. Bank of America will ask you to verify the transfer by confirming a small deposit (usually under $1) that the new bank sends back—this takes one to two business days. Once verified, you can transfer your full balance.

Alternatively, you can call your new bank and ask them to pull the money from Bank of America on your behalf. This is called an ACH transfer and takes the same amount of time. Either way, your Bank of America account stays open and active if you want to keep your checking there.

The real cost of staying with Bank of America for savings

The difference between 0.04% and 4.5% does not sound dramatic until you do the math. On $25,000 saved for five years, Bank of America would earn you $50 in interest. The same money at 4.5% would earn you $5,850. That is $5,800 you leave on the table by staying put.

The opportunity cost compounds over time. If you are building an emergency fund or saving for a down payment, every month you delay moving that money costs you real dollars in lost interest. The switching process is free and takes less than an hour of your time spread over a few days.

What to watch for when choosing a new bank

When you move to a new institution, check three things: the current interest rate (which changes), whether there is a monthly maintenance fee (most high-yield accounts have none), and whether the bank is FDIC-insured. You can verify FDIC insurance by searching the bank's name on the FDIC website.

Also check the minimum balance requirement. Some banks require $0 to open; others require $500 or $1,000. A few offer slightly higher rates if you maintain a larger balance. Read the account terms before you open, but do not let a small minimum balance requirement stop you—most online banks have none.

Frequently Asked Questions

Can I keep my Bank of America checking account and move only savings?

Yes. You can close your Bank of America savings account and move that money to another bank while keeping your checking account there. Many people do this because they want to keep their debit card and bill pay set up at Bank of America but earn a real rate on savings elsewhere.

Will moving my money hurt my credit score?

No. Opening a savings account and transferring money between banks does not affect your credit score. Credit scores are based on borrowing and repayment history, not on where you keep deposits.

What if I need the money before the transfer completes?

Transfers between banks take one to three business days. If you need money urgently, keep it in your Bank of America checking account or keep a smaller emergency fund there while moving the bulk of your savings elsewhere. You can always transfer money back if needed.

Are online banks as safe as Bank of America?

Yes, as long as they are FDIC-insured. FDIC insurance protects your deposits up to $250,000 per account, regardless of whether the bank has physical branches. You can verify a bank's FDIC status on the FDIC website before you open an account.

Do I have to close my Bank of America savings account?

No. You can leave it open with a zero balance if you want, though most people close it to simplify their finances. Closing takes one phone call to Bank of America customer service.