Bank of America customers hoping to cash in on today's higher interest rates may want to sit down.
The bank's flagship savings account still pays a fraction of what many online competitors offer, and the gap is getting harder to ignore as the Federal Reserve keeps rates elevated.
The bank's standard savings account has long hovered near 0.01% APY, according to its published rate disclosures.
On a $10,000 balance, that works out to roughly $1 a year in interest.
Meanwhile, a growing list of online banks and money market accounts are paying in the 4% to 5% range, putting the difference at hundreds of dollars annually for the same deposit.
Big banks like Bank of America lean on branch networks, brand recognition, and the inertia of long-time customers who never bother to move their cash.
Deposits are cheap funding for them, and the loyal customer who keeps a cushion in a low-yield account is effectively subsidizing the bank's bottom line.
The pitch for staying put usually centers on convenience.
Your checking, savings, and credit card live in one app, transfers are instant, and there's a branch down the street.
That's real value, but it's worth asking whether it's worth $400 or more a year on a $10,000 balance.
Bank of America does offer higher-yielding options, including promotional rates on some savings products and tiers through its Preferred Rewards program.
Those rates still tend to trail the top online accounts, and they often come with balance requirements or relationship conditions that not everyone meets.
The practical move for many households is a split approach.
Keep a working buffer in the Bank of America account for bills and emergencies, then park the rest in a high-yield savings account or a short-term Treasury or CD ladder.
Transfers between institutions now take a day or two at most, and the extra yield compounds.
One caution: rates on the high-yield side aren't locked in forever.
If the Fed cuts, those 5% offers can shrink fast, while the big bank's 0.01% barely moves either way.
That asymmetry is exactly why the gap exists in the first place.
Some online accounts have minimum balances, withdrawal limits, or promotional rates that expire after a few months.
A genuinely competitive account pays a strong rate without hoops, and it's insured up to $250,000 per depositor through the FDIC.
For anyone with a meaningful cash cushion, the math is simple enough to run in a few minutes.
Compare what you're earning now against a realistic alternative, subtract any lost convenience, and decide if loyalty is still paying its way.
The bigger lesson here is that brand loyalty rarely pays interest.
Final Thoughts
Banks count on customers not checking, and the ones who do check tend to come out ahead.