Bank of America CD Rates
Bank of America, headquartered in Charlotte, North Carolina, was founded in 1998 and is now one of the nation’s largest banks servicing over 66 million customers. Consumers looking to find all of their banking and lending needs to be met under one roof will enjoy the immense list of banking products offered through Bank of America. While the Bank of America CD rates is not the highest in the industry, preferred customers holding higher balances may be able to get more competitive rates.
Bank of America at a glance
|Bank||Minimum Deposit||1-Year APY||3-Year APY||Penalty|
|Bank of America||$1,000||0.03%||0.10%||90 days of interest on 12-month CDs; 180 days of interest on 36-month CDs|
What we like about it
Through Bank of America, CDs are FDIC insured and come backed by one of the largest banks in the country. Investors looking for a fixed-rate investment through a trusted banking partner will like what the bank has to offer. Additionally, investors with over $10,000 to put into a CD can take advantage of featured CD products offering a higher interest rate than is available through the standard CD investments.
Things to consider
Comparatively to many other traditional banks, the rates on Bank of America’s CDs are somewhat lower. Compared to fully online banks, the rates are much lower. For customers willing to utilize a fully online bank, you can get much higher CD rates, although you will lose the ability to walk into a branch location to speak with a representative if you need face-to-face assistance.
What you need to know
On Bank of America’s standard CDs, APYs range from 0.03% to 0.10%, depending on the term length you select and the amount of your investment. Term lengths are available from as short as one month all the way out to 10 years. The highest APY rates start at the three-year mark and stay constant all the way out to the maximum term length.
Compared to other brick and mortar banks, the rates are either comparable or a bit lower. For example, a one-year CD at Wells Fargo is available with an APY around 0.01%, whereas you’ll only get 0.03% APY at Bank of America. When you stack a Bank of America CD up against online banks, the rate disparity is even higher. For example, a 1-year CD at Discover Bank is available for .90%, and a 1-year CD at Capital One is also available for 1.00% APY.
There are no penalties or fees outside of early withdrawal fees on a Bank of America CD. You do not need to be an existing bank customer to open a CD investment through the bank.
Early withdrawal penalties
As is standard with all CD products, Bank of America will charge interest penalties for any early withdrawals from a CD account. For CDs under a year, the penalty will be up to 90 days of interest. If you withdraw before you have the CD for 90 days, it will be all the interest you have earned. For CDs that are equal to or over the year mark but less than five years, the early withdrawal penalty is 180 days of interest. And for any CD over five years, the early withdrawal penalty is up to 365 days of interest. You will never lose any of your principal with a Bank of America CD.
Here’s what that might look like: Let’s say that you take out a three-year Bank of America CD for $1,000. You plan to leave the money untouched, but an emergency arises at the six-month mark, and you need access to your money. At the end of six months, you would have earned 75 cents in interest. According to the penalty schedule, you will need to return up to 180 days of interest. Since you have only had the account for 180 days, the 75 cents goes back to the bank.
If you held the CD for an additional month (as an example), you would get to keep that additional interest, as the maximum penalty is 180 days of interest. Still, in this worst-case scenario, you are leaving with 100% of your principal, which is always safe.
Other CD products
Bank of America also offers a featured CD product for investors willing to deposit at least $10,000. Terms for these specialty CD products are available in term lengths of 7, 10, 13, 25 and 37 months. APY rates are available at 0.20%.
Bank of America does not offer any rate guarantees on any of its CD products. However, when you invest in a CD, you will lock in the rate you receive for the entire term of the CD. The bank cannot change it for any reason.
How do I pick the best CD?
Picking out the best CD for you requires a look at more than just the APY rate. While that is the most important factor, it needs to be weighed alongside several other important items. The first area you need to check with a CD is if it is FDIC or NCUA insured. If the federal government does not protect the account, you shouldn’t use it.
Once you check that box, look at the CD for features like the term lengths offered, the minimum required deposit and any penalties you might be assessed should you need to make an early withdrawal. Ultimately, the APY rate is the most important, but only if all the other boxes line up correctly.
The bottom line
Bank of America’s CDs are a bit behind the curve when it comes to APY rates compared to other traditional and online banks. That being said, the comprehensive list of other banking products offered by the bank may be a selling point for consumers looking to meet all of their banking needs under one roof. Additionally, rates do improve for investors with at least $10,000 to invest in a featured Bank of America CD.