You’ve probably seen the ads. Bank of America is everywhere. They have those shiny ATMs on every corner and an app that basically runs your life. But if you’ve actually looked at your monthly statement lately, you might have noticed something kinda depressing. That Bank of America APY on your savings account is probably sitting at a measly 0.01%.
It’s basically pennies.
Honestly, it’s frustrating. You work hard for your money, you park it in a "safe" spot, and the bank rewards you with enough interest to buy... maybe a single gumball at the end of the year? If you’re lucky. But here is the thing: Bank of America isn't exactly trying to compete with the high-yield online banks you see blowing up on social media. They play a different game.
The Reality of the 0.01% Standard
Let's be real. Most people opening a Bank of America Advantage Savings account aren't doing it for the interest rate. They do it because they already have a checking account there, and hitting "open account" in the app takes three seconds. Convenience is a powerful drug.
For the vast majority of standard accounts, the Bank of America APY is 0.01%. That is the base rate. To put that in perspective, if you keep $10,000 in that account for an entire year, you will earn exactly $1.00 in interest. One dollar. Inflation will eat that dollar—and a chunk of your $10,000—before you even finish reading this paragraph.
Why is it so low? Because they can. Big "brick-and-mortar" banks like BofA, Chase, and Wells Fargo have massive overhead. They have thousands of physical branches to heat, cool, and staff. They have a massive marketing budget. They don't need to lure you in with high interest rates because they already have your mortgage, your credit card, and your direct deposit. They are "sticky."
Is there a way to get a higher rate?
Yes, but there is a catch. Or several catches.
Bank of America has a tier system. It’s called the Preferred Rewards program. This is where things get a bit more complex, and frankly, where most people realize they might be better off elsewhere unless they are already sitting on a pile of cash.
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To even get a sniff of a better Bank of America APY, you need to be a member of this program. This requires a three-month average combined balance of at least $20,000 across your BofA banking and Merrill investment accounts.
- Gold Tier ($20k - $50k): You get a tiny boost, but it’s still negligible.
- Platinum Tier ($50k - $100k): The boost gets slightly better.
- Platinum Honors ($100k - $1M): Now we’re talking about "decent" territory, but still usually lower than what you’d find at an online-only bank.
- Diamond Tier ($1M+): If you have a million bucks, you probably aren't worried about a savings APY, but you get the highest "boost" available here.
Even with these boosts, the rate often only climbs to 0.02% or 0.05% for many tiers. It’s a "boost" on a tiny number, which results in... another tiny number.
Comparing BofA to the Rest of the Market
It’s 2026. The financial world has changed. While the Federal Reserve's moves influence everything, the gap between traditional banks and "challenger" banks is wider than ever.
If you look at online institutions like SoFi, Ally, or Marcus by Goldman Sachs, they are often offering APYs between 4.00% and 5.00%. Let’s do that math again. That same $10,000 that earned you $1 at Bank of America could be earning $400 to $500 elsewhere.
That is not a small difference. That’s a car payment. That’s a flight. That’s a very nice dinner out.
So, why stay? Some people value the ability to walk into a branch and talk to a human being named Steve when their debit card gets eaten by a machine. There is genuine value in that. If you have a complex banking need, or you frequently deposit large amounts of physical cash (like a small business owner), BofA makes a lot of sense. But for a pure "emergency fund" or "house down payment fund," the current Bank of America APY is objectively a losing proposition.
The Hidden Value in Preferred Rewards
I want to be fair here. While the interest rate on savings is low, the Preferred Rewards program isn't a total wash. If you are a high-net-worth individual or you use Merrill for your stocks, the perks can actually outweigh the low APY.
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For example, the Platinum Honors tier gives you a 75% bonus on credit card rewards. If you use the Customized Cash Rewards card, your 3% category jumps to 5.25%. For a big spender, that cash back can easily total thousands of dollars a year—way more than you’d earn in interest at an online bank.
It’s a trade-off. You give up the Bank of America APY on your liquid cash in exchange for massive multipliers on your credit card spending and discounts on mortgage origination fees. For the "average" person with $5,000 in savings, this doesn't help. For someone with $100,000 split between a 401k and a checking account, it’s a strategy.
What Most People Get Wrong About APY vs. APR
I see this all the time. People get confused between APY (Annual Percentage Yield) and APR (Annual Percentage Rate).
APY is what you earn. It includes the effect of compounding—interest earning interest.
APR is what you pay (usually on a loan or credit card).
When you see that 0.01% Bank of America APY, that is the yield. Because the number is so low, compounding barely matters. Whether it compounds daily, monthly, or yearly, 0.01% is still basically zero.
On the flip side, if you carry a balance on a Bank of America credit card, you might be paying an APR of 20% to 30%. The math is brutal. The bank is paying you 0.01% to "borrow" your savings, and then charging someone else 25% to borrow that same money. That's the business model. It's how they pay for those skyscrapers in Charlotte and Manhattan.
Are there any high-yield options at BofA?
Occasionally, Bank of America will offer "Featured" CDs (Certificates of Deposit). These are different from the standard savings account.
A CD requires you to lock your money away for a specific term—maybe 7 months or 13 months. In exchange for you promising not to touch the cash, they give you a much higher rate. In the current market, you can sometimes find BofA CDs hovering around 4.00% or higher, depending on the promotion and how much you deposit (usually a $1,000 minimum).
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But beware. If you take the money out a month early because your water heater exploded, they will hit you with an early withdrawal penalty that can eat all the interest you earned and maybe even some of your principal.
The Merrill Edge Alternative
If you really want to stay in the BofA ecosystem but hate the low Bank of America APY, look at Merrill Edge. Since Merrill is owned by BofA, your balances count toward your Preferred Rewards status.
Inside a Merrill investment account, you can buy Money Market Funds (like TTTXX or similar). These funds currently yield significantly more than the savings account—often 5% or more—because they invest in short-term government debt. It’s not "FDIC insured" in the same way a savings account is, but it’s considered very low risk. It’s a "pro move" for people who want to keep their money "at the bank" but actually want it to grow.
Practical Steps to Maximize Your Cash
Stop settling for 0.01%. It’s your money.
If you are determined to stay with Bank of America for the convenience, you need to be strategic. Don't just let $50,000 sit in a standard savings account. You are literally losing purchasing power every single day.
First, check your balance. If you have more than $20,000, make sure you are officially enrolled in the Preferred Rewards program. It isn't always automatic. You have to join.
Second, look at your "Lazy Money." This is the cash sitting around doing nothing. Keep what you need for next month's bills in your checking account. Keep a small cushion in savings. Move the rest.
Third, consider the "Two-Bank System." This is what I personally do. Keep your BofA account for the ATM access, the physical branches, and the great app. But open a secondary account at an online bank (like Ally or Wealthfront). Link them. It takes about 1-2 business days to move money between them.
You get the best of both worlds: the reliability of a global giant and the 4.50%+ interest rate of a digital disruptor.
Actionable Next Steps
- Log in to your BofA app and look at your "Interest Statement" for last year. If you earned less than $10 and you have thousands in the bank, it’s time to move.
- Evaluate your "Relationship." If you don't have a mortgage or a high-limit credit card with them, you owe them no loyalty. The convenience of an ATM isn't worth losing $500 a year in interest.
- Check CD rates. If you know you won't need your "emergency fund" for 6 months, see if BofA has a "Featured CD" special. It’s the easiest way to stay in-house while getting a rate that doesn't feel like a joke.
- Explore Money Market Funds via Merrill Edge if you have an investment account. This is the "hidden" way to get a high Bank of America APY (technically a yield) without leaving the platform.
- Automate a transfer. Set up a monthly "sweep" where any money over a certain amount in your BofA account gets sent to a high-yield savings account elsewhere.
The bottom line? Bank of America is a great bank for technology and scale, but it is a terrible place to "grow" your savings. Use them for what they are good at, and go elsewhere for the interest you deserve.