Bank of America customers are earning pennies on their savings while competitors hand out dollars for the same money.
The Charlotte-based giant still pays a baseline 0.01% annual percentage yield on its standard savings account, a rate that has barely budged even as the Federal Reserve held its benchmark rate in a range that kept many online banks paying above 4%.
On a $10,000 balance, that 0.01% works out to about $1 a year.
The same $10,000 sitting in a high-yield savings account at 4.00% would earn roughly $400.
That gap, close to $399, is the quiet tax millions of Americans pay for keeping their cash at the same bank where they have a checking account.
Big banks with thousands of branches, tellers, and legacy systems don't have to compete hard for deposits because customers tend to stay put.
Switching feels annoying, so the money sits.
Meanwhile, online-only banks with no branch overhead use those higher rates as their main marketing tool.
Bank of America does offer better yields through its Preferred Rewards program, but there's a catch.
The top tiers generally require combined balances of $20,000 to $100,000 or more across checking, savings, and investment accounts.
Customers below those thresholds, which is most of them, stay stuck at the base rate.
There's another wrinkle worth knowing about.
Some Bank of America savings accounts carry a monthly maintenance fee, often around $8, that can be waived with a minimum balance or a linked checking account.
If you're earning $1 a year in interest and paying $96 in fees, the math turns ugly fast.
It's usually printed on your statement or visible in the app under account details.
If you're seeing 0.01%, you already know the answer.
Second, compare against what's available.
Reputable online banks and some credit unions have been paying in the 3.5% to 4.5% range depending on the week and the Fed's next move.
Rates on these accounts are variable, meaning they can fall if the Fed cuts, so don't treat any quoted number as locked in forever.
Third, don't feel obligated to move everything.
Many people keep a checking account at a big bank for ATMs, branches, and direct deposit, then park emergency savings at a higher-yield institution.
Transfers between the two typically take one to three business days, which is fine for money you're not touching weekly.
One caution: watch for promotional rates with strings attached.
Some accounts require a minimum deposit, a certain number of debit card transactions, or a balance cap before the top rate applies.
Read the fine print before moving a chunk of your savings.
Interest earned in any savings account is taxable income, and your bank will send a 1099-INT if you earn $10 or more.
A higher yield means a bigger tax bill, but you're still coming out far ahead after taxes than you would at 0.01%.
The bottom line is that loyalty to a big bank rarely pays interest, literally.
A few minutes spent comparing rates could be the highest-paid work you do all year.
Final Thoughts
Your money doesn't care which logo is on the app, and neither should you.