Bank of America customers are earning far less on their savings than they could be getting almost anywhere else.
The Charlotte-based bank's flagship savings account currently pays a fraction of what online competitors offer, and the gap has widened as the Fed holds rates steady well above zero.
Bank of America's standard savings account has hovered around 0.01% APY for years.
On a $10,000 balance, that works out to about a dollar a year.
Meanwhile, a growing list of online banks and money market funds are paying north of 4% — roughly $400 on the same balance.
It's a difference of hundreds of dollars annually for the typical household, and it compounds the longer the money sits there.
Why the gap persists comes down to business model.
Big banks like BofA are sitting on enormous deposits and don't need to compete for more.
Customers who keep checking and savings at the same institution often stay out of habit, convenience, or the belief that switching is a hassle.
Retail deposits are effectively cheap funding, and the bank has little incentive to pay up.
Preferred Rewards members get perks like higher credit card cash back and waived fees, which can make the low savings yield feel like part of a bigger package.
But run the math on the savings side alone and the tradeoff rarely holds up unless you're parking very little cash there.
The practical takeaway for savers is straightforward.
Treat checking and savings as two separate jobs.
Keep the checking account if you rely on branch access, ATMs, or direct deposit timing — those conveniences are real.
Then move the emergency fund and any cash you won't touch for months into a high-yield savings account or money market fund at an FDIC-insured institution.
A few things to check before you switch: minimum balance requirements, monthly fees, withdrawal limits, and whether the advertised rate is promotional or ongoing.
Some of the highest teaser rates quietly drop after a few months.
Also confirm FDIC coverage limits, especially if you're splitting larger balances across accounts.
Transferring isn't as painful as it sounds.
Most online banks let you link an external account and pull funds electronically in a few business days.
You can leave a small buffer in the BofA account to cover bills and automate the rest.
For anyone with a meaningful cash cushion, the annual difference between 0.01% and 4%-plus is real money — enough to cover a month of groceries or a utility bill.
Loyalty to a single bank is fine for convenience, but it shouldn't come at the cost of leaving hundreds on the table every year.
Final Thoughts
Rates won't stay elevated forever, so the window to act is worth using while it's open.