Bank of America customers with a standard savings account are earning a fraction of what their cash could bring in elsewhere — and the gap is wider than most people realize.
The bank's flagship savings rate has hovered around 0.01% annual percentage yield, according to Bankrate's ongoing survey of U.S. banks.
On a $10,000 balance, that works out to roughly $1 a year.
Meanwhile, the same $10,000 sitting in a high-yield savings account paying around 4% would earn close to $400 over the same period.
The reason is simple: big banks with millions of existing customers don't have to compete on deposit rates.
They already have your money, and switching takes effort most people never get around to making.
Bank of America does offer a higher-tier option — the Preferred Rewards program — but it isn't automatic.
You generally need at least $20,000 in combined balances across Bank of America and Merrill accounts to qualify for the lowest tier, and the yield bump is still modest compared to what online banks pay.
Many customers stay because their checking account, direct deposit, and bill pay are all tied together.
Breaking that apart feels like a hassle, so the low rate quietly persists year after year.
The Federal Reserve's rate decisions over the past two years have pushed online banks and credit unions to compete aggressively for deposits.
Those institutions don't have branches to maintain, so they pass more of the yield back to savers.
Traditional brick-and-mortar banks have largely kept their savings rates flat.
If you're not ready to leave Bank of America entirely, there's a middle path.
You can keep your checking account for bills and move only your emergency fund to a high-yield account at an online bank.
Transfers between banks typically take one to three business days, and most online accounts have no minimum balance or monthly fee.
Before you move anything, check two things: whether your current account has a minimum balance requirement that triggers a fee, and whether closing it would affect any bundled benefits like waived monthly maintenance or credit card perks.
Sometimes the checking relationship is worth keeping even if the savings account isn't.
Also watch out for promotional rates that sound high but come with strings — some require a minimum number of debit card transactions per month, or the rate only applies to the first $1,000.
For anyone with more than a few thousand dollars parked in a big-bank savings account, the math isn't close.
A few minutes of paperwork once could be worth hundreds of dollars a year, and that's money you don't have to work for.
The takeaway here isn't that Bank of America is doing anything illegal — it's that loyalty to a big bank rarely pays you back.
Final Thoughts
Your savings rate is one of the few financial numbers you can change today with almost no risk, so it's worth checking what you're actually earning before another year goes by.