Are you looking for a way to grow your money without taking too much risk? Do you want to earn some interest on your savings while keeping them accessible and secure? If you answered yes to these questions, then you might be interested in opening a BofA savings account.
A BofA savings account is a type of deposit account offered by Bank of America, one of the largest and most reputable banks in the US. In this blog post, we will explain what a BofA savings account is, how it works, what are the benefits and drawbacks of having one, and how to open one online.
The BofA savings account interest rate is the amount of money that you earn on your savings balance every year. The higher the interest rate, the more money you make. However, the BofA savings account interest rate is not fixed and can change depending on various factors, such as the market conditions, the bank’s policies, and your account status.
According to the bank’s website, the current BFA savings account interest rate is 0.01% APY for the standard tier. However, you can increase your interest rate up to 0.04% APY by enrolling in the Preferred Rewards program, which offers different tiers based on your combined balance across your Bank of America accounts.
What are the advantages of a BofA savings account?
Easy to open and manage
One of the main advantages of a BofA savings account is that it is easy to open and manage. You can open a BFA savings account online in a few minutes by filling out a simple application form and providing some personal information, such as your name, address, social security number, and email. You can also open a BofA savings account at any Bank of America branch or by calling the customer service number.
Once you have opened your BFA savings account, you can access it anytime and anywhere through the Bank of America website or mobile app. You can check your balance, transfer money, deposit checks, pay bills, and more. You can also set up alerts and notifications to keep track of your account activity and avoid fees.
FDIC insured
Another advantage of a BofA savings account is that it is FDIC insured. This means that your money is protected by the Federal Deposit Insurance Corporation, a government agency that guarantees the safety of your deposits up to $250,000 per depositor, per insured bank, for each account ownership category. This means that even if Bank of America fails, you will not lose your money. FDIC insurance is free and automatic for all BOFA savings account holders.
No minimum balance requirement
A third advantage of a BofA savings account is that it has no minimum balance requirement. This means that you can open a BofA savings account with as little as $100 and keep any amount of money in it without worrying about fees or penalties. This makes a BofA savings account ideal for anyone who wants to start saving or who has a variable income.
What are the disadvantages of a BofA savings account?
Low interest rate
One of the main disadvantages of a BofA savings account is that it has a low interest rate compared to other savings options. As we mentioned earlier, the BFA savings account interest rate is 0.01% APY for the standard tier and up to 0.04% APY for the highest tier of the Preferred Rewards program. This means that you will not earn much interest on your savings, especially after accounting for inflation and taxes.
In contrast, the national average savings account interest rate as of November 20, 2023 was 0.46% APY, according to the FDIC. This means that you could earn $46 in interest on the same amount of money in a different savings account
Monthly maintenance fee
Another disadvantage of a BofA savings account is that it charges a monthly maintenance fee of $8. This fee is waived if you maintain a minimum balance of $500, or if you link your BFA savings account to your Bank of America checking account, or if you are a student under 24 years old. However, if you do not meet any of these criteria, you will have to pay the fee every month, which can reduce your savings and negate the interest you earn.
How to open a BofA savings account online?
If you are interested in opening a BofA savings account online, you can follow these steps:
- Go to the Bank of America website and click on “Open now” under “Advantage Savings”.
- Choose whether you want to open an individual or joint account and click on “Continue”.
- Enter your personal information, such as your name, address, phone number, email, social security number, date of birth, and citizenship status. Click on “Continue”.
- Review and agree to the account terms and conditions, fees, and disclosures. Click on “Continue”.
- Fund your account by transferring money from another bank account, using a debit card, or mailing a check. You can also skip this step and fund your account later. Click on “Continue”.
- Confirm your account details and click on “Submit application”.
- You will receive a confirmation email with your account number and instructions on how to access your account online.
Conclusion
A BofA savings account is a deposit account offered by Bank of America that pays interest on your savings balance. It has some advantages, such as being easy to open and manage, FDIC-insured, and having no minimum balance requirement. However, it also has some disadvantages, such as having a low-interest rate and charging a monthly maintenance fee. Therefore, you should compare the BofA savings account with other savings options and choose the one that best suits your needs and goals.
We hope you found this blog post helpful and informative. If you did, please share it with your friends and family who might be interested in saving money with a BofA savings account. Thank you for reading and happy saving!
FAQ
What is the difference between a BofA savings account and a BofA money market account?
A BofA savings account and a BofA money market account are both deposit accounts that pay interest on your savings balance. However, a BofA money market account typically offers a higher interest rate than a BofA savings account, but also requires a higher minimum balance and may have more restrictions on withdrawals and transfers.
How can I increase my BOFA savings account interest rate?
You can increase your BOFA savings account interest rate by enrolling in the Preferred Rewards program, which offers different tiers based on your combined balance across your Bank of America accounts. The higher your tier, the higher your interest rate. The tiers are:
- Gold: $20,000 to $49,999.99 combined balance. Interest rate: 0.02% APY.
- Platinum: $50,000 to $99,999.99 combined balance. Interest rate: 0.03% APY.
- Platinum Honors: $100,000 or more combined balance. Interest rate: 0.04% APY.
How can I avoid the monthly maintenance fee on my ofA savings account?
You can avoid the monthly maintenance fee of $8 on your Bofa savings account by meeting one of the following criteria:
- Maintain a minimum balance of $500.
- Link your bofa savings account to your Bank of America checking account.
- Be a student under 24 years old.
