Table Of Content
Bank of America is best known for its everyday banking products including checking, savings and credit card accounts, but this financial institution also offers CDs.
Unfortunately, as is fairly typical with traditional banks, Bank of America CD rates are not particularly attractive. But, here we’ll explore these products in more detail to help you decide if they are the right option for you.
Bank of America CDs
APY Range
Minimum Deposit
Terms
Our Rating
Bank of America CDs
APY Range
Minimum Deposit
Terms
Our Rating
Bank of America CD Rates
When compared to other traditional banks, Bank of America CD rates are fairly typical. Most traditional banks don’t offer the best CD rates unless you are prepared to deposit large sums into your new CD.
With the current average APY for CDs being approximately 1.73%, many of the Bank of America CD terms fail to deliver an above-average rate. In fact, the rate for most CDs falls well below this average. However, featured CDs have higher interest.
CD Term | APY |
|---|---|
6 Months | 0.03% |
7 Months (Featured) | 4.75% |
12 Months | 0.03% |
13 Months (Featured) | 4.30% |
24 Months | 0.03% |
25 Months (Featured) | 3.20% |
36 Months | 0.03% |
When you compare Bank of America CD rates with the rates offered by many online banks, the comparison becomes even more unfavorable. The online bank rates are typically far higher, since online banks don’t need to cover the expense of maintaining a branch network.
However, it is also important to point out that many online banks also don’t have the high minimum deposit requirement of Bank of America CDs.
How Much Can You Earn If You Deposit $100,000 Today?
Here are the expected earnings (before taxes), assuming a deposit of $100,000 into Bank Of America CD, if interest is compounded daily and there is no early withdrawal penalty:
CD Term | Interest Earned |
|---|---|
6 Months | $15
|
7 Months (Featured) | $1,887
|
12 Months | $30
|
13 Months (Featured) | $4,144
|
24 Months | $59
|
25 Months (Featured) | $62
|
36 Months | $148
|
How Bank Of America CDs Work
Bank of America currently offers two types of CD products.
Its fixed-term CDs are a traditional type of CD, with terms varying from 28 days to 10 years. There is a $1,000 minimum balance required regardless of the term, but both your initial deposit and term determine the rates. Currently, the available rate is low across all terms and amounts, but this may change, so it is important to check the full rate options before you open an account.
Bank of America also has its Featured CD, which is designed for those who can deposit a higher initial deposit. You’ll need a minimum of $1,000 to open an account and there are several term options from 7 months to 37 months. Currently, the rates vary from 0.05% – 5.00% APY, with the higher rates typically available for longer terms and higher balances.
With either type of CD, if you need to make a withdrawal before the maturity date, an early withdrawal penalty will apply. The CD term will determine the specific amount of the penalty. If you compare the early withdrawal penalty with other banks, BoFa penalties are quite average.
If your CD has a term of less than 90 days, the penalty is seven days of interest. This increases to 90 days for CD terms of 90 days to 12 months, 180 days for terms of 12 months to 60 months and 365 days for CDs with a term of over 60 months.
CD Term | Penalty |
|---|---|
6 Months | 90 days of interest
|
7 Months (Featured) | 90 days of interest |
12 Months | 180 days of interest
|
13 Months (Featured) | 180 days of interest
|
24 Months | 180 days of interest |
25 Months (Featured) | 180 days of interest |
36 Months | 180 days of interest |
Bank of America CD Rates vs Savings Rates
Bank of America also has savings accounts, but the rates are typically lower than the base Bank of America CD rates. There are loyalty tiers, which allow Preferred Rewards members to earn higher APYs on their savings accounts, but even the top tier is less than the lowest CD rate.
The main reason for this is that there are no restrictions to accessing your funds. You can make a withdrawal at any time without incurring an interest penalty. Additionally, the opening balance requirement for BoFa savings account is far lower at $100.
However, it is important to bear in mind that the Bank of America savings account does have a monthly maintenance fee. This can be waived if you maintain a daily balance of $500 plus, link your Bank of America Advantage Relationship account, or if you’re a Bank of America Preferred Rewards client. The fees are also waived for under 18s or students under the age of 25.
CDs | Savings | |
|---|---|---|
APY | 0.05% – 5.00% | 0.01% – 0.04% |
Minimum Deposit | $1,000 | $100 |
Fees | $0 | $8 per month
Can be waived by maintaining a balance of $500+, becoming a Preferred Rewards member or linking to your B of A Advantage Banking account. Fees are also waived for enrolled students aged under 24
|
About Bank of America
Bank of America can trace its roots back to 1930 when entrepreneurial Amadeo Peter Giannini began helping residents with handshake loans to recover from the 1906 San Francisco earthquake.
Today, Bank of America is one of the most well-established Banks in America. The bank has a comprehensive product line, including checking and savings accounts, credit cards, IRAs, auto loans, and home loans. On our BoFa review, you can read more on Bank Of America's pros and cons.
FAQs
Does Bank Of America Offer No Penalty CD Rates?
Bank of America does not currently have a no-penalty CD. But, there are other banks who offer competitive no-penalty CD Rates.
Does Bank Of America offer promotions on CDs?
Bank of America does have its featured CD, but this is exclusively available for those who are willing to deposit a larger amount of at least $10,000.
Do Bank Of America CDs come with a grace period?
Bank of America CDs auto renew when they reach the maturity date, but there is a grace period during which you can make withdrawals or deposits, change the term or close out your account.
The grace period varies according to the CD term. If the term is less than 27 days, it is one calendar day. If your CD has a term of 28 days or more, the grace period increases to seven calendar days.
How Bank Of America CDs interest are calculated?
Interest on your Bank of America CD is compounded monthly and added to your account.
How does the Bank Of America early withdrawal penalty work?
If you need to make a withdrawal before your CD matures, you’ll pay a penalty calculated at a number of days of interest. The number of days depends on the CD term from 7 to 365 days with shorter term CDs incurring a lower early withdrawal penalty.
For example, a CD with a term of 60 days, the early withdrawal penalty is seven days of interest, but a 60 month CD has a 365 day interest penalty. This penalty relates to the term length of the CD not the remaining number of days before maturity.
How We Rate Certificates of Deposits: Our Methodology
The Smart Investor team has thoroughly examined certificate of deposit (CD) offerings from various banks, considering multiple factors to provide a comprehensive evaluation. Here's how we rated them across four key categories:
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CD Rates (50%): We meticulously analyzed the interest rates offered by each bank on their certificate of deposit (CD) products. Higher ratings were awarded to banks offering competitive rates that provide maximum returns for customers' investments. Factors such as the yield curve, current market conditions, and consistency of rates were considered to assess the attractiveness of each bank's CD rates.
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CD Features (30%): This category evaluated the features associated with each bank's certificate of deposit offerings. Factors considered include the variety of terms available, early withdrawal penalties, minimum deposit requirements, and any additional features or benefits. Higher ratings were given to banks offering a diverse range of CD terms, reasonable early withdrawal fees, and flexible options to meet customers' investment needs.
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Customer Experience (10%): A positive customer experience is paramount, even when investing in CDs. We assessed each bank's performance in this area, considering factors such as the ease of opening a CD account, the responsiveness of customer service, and overall user satisfaction. Higher ratings were assigned to banks with efficient account opening processes, helpful customer support, and a track record of satisfying customers.
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Bank Reputation (10%): The reputation of a bank is a critical consideration when investing in CDs. We evaluated each bank's reputation based on factors such as financial stability, regulatory compliance, and public perception. Higher ratings were given to banks with a solid reputation for reliability and trustworthiness, ensuring customers' investments are safe and secure.
By considering these categories and assigning appropriate weights to each, our review aims to provide valuable insights to help individuals make informed decisions when investing in certificate of deposits.
