Bank of America is paying 0.01% on its standard savings account.
On $10,000 parked there for a full year, you earn about a dollar.
Meanwhile, the same bank will happily charge you double-digit interest on a credit card balance, and it's been reporting billions in quarterly profit.
For most of 2023 and 2024, the Federal Reserve's benchmark rate sat above 5%, the highest in over two decades.
That's the rate banks earn parking their own money at the Fed.
High-yield savings accounts at online banks spent that stretch paying customers 4% to 5%.
Customers at megabanks tend to stay put, held in place by branches, direct deposit, auto-pay, and plain inertia.
Industry analysts call these balances "sticky," which is a polite way of saying the money isn't going anywhere, so the bank has little reason to pay for it.
Do the math on your own balance. $5,000 at 0.01% earns 50 cents a year.
That's a difference of roughly $199.50, which is several weeks of groceries for a lot of households.
On $20,000, the gap runs past $790 a year.
None of this requires new income or a side hustle.
Switching isn't complicated, but it does take a few steps.
Open a high-yield savings account, confirm it's FDIC insured, and link it to your checking account.
Keep a cushion in checking to avoid overdraft fees, and check whether your bank charges a transfer fee or requires a minimum balance.
Rates at online banks move with the Fed, so verify the current number before you commit.
Some promotional rates come with balance caps or expiration dates.
A few honest caveats, because this story has them.
Yields have drifted down as the Fed has cut rates, so the 5% era is fading.
Some online banks limit withdrawals or slow transfers.
And a savings account isn't an emergency fund if you can't reach the money fast.
Also worth noting: the 0.01% figure applies to the standard savings product.
Bank of America's Preferred Rewards tiers can bump that slightly, and the bank pushes customers toward CDs and Merrill investment accounts instead.
If you have significant money sitting in a basic savings account, an advisor there may steer you elsewhere.
That's a clue about how the bank views that account.
There's a bigger question here than one bank's rate sheet.
For years, the pitch to consumers has been that big banks offer safety and convenience in exchange for lower yields.
But deposits are federally insured up to $250,000 at virtually every bank, including the online ones.
Convenience now means an app and a debit card.
Mostly a branch you visit twice a year and a brand you recognize.
My take: the rate itself isn't a scandal, since banks are allowed to pay what they want.
The scandal is how little attention most of us pay to it.
A dollar a year on ten grand is not a savings account.
Final Thoughts
It's a storage unit with a logo, and you're the one paying rent.