Bank of America customers hoping their savings account is keeping pace with inflation are in for a letdown.
The bank's standard savings rate sits at a national average of just 0.01% annual percentage yield, a number that has barely budged even as the Federal Reserve's benchmark rate hovers well above where it sat for most of the past decade.
On a $10,000 balance, that works out to roughly one dollar a year in interest.
Meanwhile, the same money parked in a high-yield savings account at an online bank could earn north of $400.
This gap is not a secret inside the industry, but it rarely gets explained at the branch.
Big banks like Bank of America, Chase, and Wells Fargo have long relied on what analysts call deposit franchise strength: customers keep money there because of convenience, branch access, and habit, not because the rate is competitive.
That loyalty has a price, and it's paid by the depositor.
To be clear, Bank of America does offer better rates through its Preferred Rewards program, which tiers benefits based on combined balances across checking, savings, and investment accounts.
The top tier can push savings yields meaningfully higher, but it typically requires a six-figure relationship balance to reach.
For the average customer with a few thousand dollars saved, the standard rate applies.
Banks earn a spread by paying depositors little and lending or investing that capital at higher returns.
When the Fed raised rates aggressively starting in 2022, that spread widened considerably for large institutions.
Some of that windfall flowed into higher yields for wealthier clients and into shareholder returns.
Little of it reached the basic savings account holder.
For consumers, the practical takeaway is straightforward: loyalty to a big-name bank rarely pays in the savings department.
High-yield savings accounts and money market accounts at online banks, credit unions, and some brokerages have consistently offered yields many times higher, often with no monthly fees and low minimums.
The tradeoff is usually a lack of physical branches, which matters less now that most banking happens on a phone.
Moving money takes a few days, and some institutions limit how often you can withdraw.
Promotional rates can drop when the Fed cuts rates, so a rate that looks great today may not hold.
And for anyone who regularly uses overdraft protection or needs in-person services, the calculus is more complicated than chasing the highest yield.
Some customers also worry about the safety of smaller institutions.
That concern is largely overblown for accounts held at federally insured banks and credit unions, where deposits are protected up to $250,000 per depositor, per institution.
It's the slow erosion of purchasing power while it sits in an account paying next to nothing.
The broader pattern here is familiar: the people with the least to spare tend to get the worst deal on their cash, while those with larger balances get access to better rates and perks.
That's not a Bank of America-specific problem, but it's most visible at the institutions with the biggest names and the most branches.
Our take: if you're keeping meaningful savings at a big bank out of habit, it's worth spending twenty minutes comparing yields.
The gap between 0.01% and 4%-plus is not a rounding error, it's real money, and the switch is usually easier than people assume.
Final Thoughts
Just read the fine print on fees and minimums before you move anything.