Bank of America's flagship savings account still pays a tiny fraction of what online competitors offer, and the gap has become impossible to ignore.
According to Bankrate and FDIC data cited across personal finance outlets, the bank's standard savings rate sits at roughly 0.01% APY.
On a $10,000 balance, that works out to about $1 a year.
The same $10,000 parked in a top-yielding online savings account paying around 4% would earn close to $400.
It's the cost of staying loyal to a branch.
Bank of America does offer a higher-yield option, but it comes with conditions.
The Preferred Rewards program bumps savings rates based on your combined balances across checking, savings, and Merrill investment accounts.
Reaching the top tier requires $100,000 or more parked with the bank.
Even then, the boosted rate tends to trail what online-only banks advertise with no strings attached.
Those institutions don't run thousands of branches or staff them, so they pass the savings back to depositors.
The math gets worse when you factor in fees.
The standard savings account charges a $8 monthly maintenance fee unless you meet a minimum balance or set up qualifying direct deposits.
That's $96 a year eating into a balance that's already barely growing.
The biggest U.S. banks have kept deposit rates low even as the Federal Reserve pushed benchmark rates higher in recent years.
They don't need to compete for deposits the way online banks do, because millions of customers keep their money in place out of habit.
The pattern has a name among economists: deposit beta.
It measures how much of a rate change banks pass through to savers.
At the largest institutions, it's historically low.
At online banks, it's close to one-for-one.
For households, the practical takeaway is straightforward.
Money you won't touch for a few months doesn't need to sit where it earns almost nothing.
High-yield savings accounts, money market accounts, and short-term Treasury bills are all paying meaningfully more right now.
Online banks can cut rates when the Fed lowers its target, and some promotional rates come with balance caps or expiration dates.
Always check whether the advertised APY applies to your full balance or just a portion.
Also confirm FDIC insurance, which covers up to $250,000 per depositor per bank.
Most reputable online institutions carry it, but it's worth verifying before moving a large sum.
Switching doesn't have to mean closing your Bank of America account.
Many people keep a checking account for direct deposit and bill pay while moving savings elsewhere.
Transfers between institutions typically take one to three business days.
The real question isn't whether Bank of America is a bad bank.
It's whether your savings are working as hard as they could be. **Our take:** Loyalty to a big-name bank is one of the most expensive habits in American personal finance.
Final Thoughts
A five-minute transfer can be worth hundreds of dollars a year, and there's no good reason to leave that on the table.