Bank of America's standard savings account is still paying account holders just 0.01% APY, a rate that has barely budged even after the Federal Reserve spent years pushing interest rates to their highest levels in decades.
On a $10,000 balance, that works out to about a dollar a year in interest.
The gap between what big banks pay and what online banks pay has turned into one of the widest spreads in modern banking history.
Many online-only banks and money market accounts have been offering somewhere in the 4% to 5% range for much of the past two years, though those yields have started drifting down as the Fed signals cuts ahead.
Even at 4%, the same $10,000 would earn roughly $400 a year instead of $1.
This isn't a Bank of America problem alone.
Chase, Wells Fargo, and most large brick-and-mortar banks pay similarly stingy rates on basic savings.
The trade-off has always been convenience: branches on every corner, ATMs everywhere, and a familiar app.
Customers are essentially paying for that convenience with the interest they never earn.
Where Bank of America does compete is in its premium tiers.
Preferred Rewards members who park larger combined balances across checking, savings, and investment accounts can qualify for higher savings yields, sometimes in the 3% to 4% range depending on their tier.
The catch is that the program requires maintaining a minimum balance across Bank of America and Merrill accounts, so it rewards people who already have money sitting there.
The bank periodically runs new-deposit bonus offers where you can earn $100 to $500 for opening a checking or savings account and meeting direct deposit or balance requirements.
Those bonuses can be worth more than a year of interest on a modest balance, but they come with fine print: timing windows, minimum deposit amounts, and clawback clauses if you close the account too soon.
For households trying to squeeze more out of their cash, the classic move still works.
Keep enough in the big-bank account to avoid monthly maintenance fees and cover immediate bills, then move the rest to a high-yield savings account at an FDIC-insured online bank.
Transfers typically take one to three business days, so it pays to keep a small buffer locally rather than sweeping every last dollar.
One thing worth remembering: savings rates are not locked in.
When the Fed cuts rates, online banks trim their yields quickly, and those 5% offers can slide to 3.5% or lower within months.
A rate that looks unbeatable today may look ordinary by next spring, so it's worth checking your statement every few months rather than setting it and forgetting it.
Some savings accounts charge monthly maintenance fees unless you meet balance or activity requirements, and a $5 monthly fee on a $500 balance wipes out most of what a decent rate would earn.
Read the fee schedule before chasing a headline APY.
Our take: loyalty to a big bank's savings account is one of the most expensive habits in American personal finance, and it costs people quietly every single month.
You don't need to close your Bank of America checking account to fix it.
Final Thoughts
You just need to stop treating your savings balance as a place to store money and start treating it as money that should be working.