Bank of America CD Rates 2021

ElitePersonalFinance
Last Update: February 22, 2021 Banking

As one of the most popular banking institutions in the United States, Bank of America offers deposit (CD) certificates that can help you save for retirement or generate some cash for your next vacation.

But, relative to the competition, how do its CD rates stack up?

Well, like many other brick-and-mortar institutions, Bank of America offers CDs with various maturities and APYs that vary depending on your account balance. But upon closer look, we found Bank of America’s CD rates not only lag all of its online banking counterparts but they also lag many of its traditional banking counterparts as well.

Bank Of America CD Accounts:

There are two Bank of America CD accounts you can choose from:

  • Featured CD Accounts

These are available to savers with a minimum of $10,000 balance but offer higher interest rates than standard CD accounts. These rates are 0.05% APY. However, if you plan to withdraw your money early, there will be penalties. The applications must be made over the phone or in-person at your local branch.

  • Standard CD Accounts

These are available to savers within a minimum of $1,000 balance and come with APYs of 0.03%0. Holding periods also range from 28 days to 10-years. However, if you plan to withdraw your money early, there will be penalties.

Let’s have a look at all Banks of America CDs:

Account: Terms: Interest Rates: APY: Minimum Amount:
Featured CD 7 months 0.05% 0.05% $10,000
Featured CD 10 months 0.05% 0.05% $10,000
Featured CD 13 months 0.05% 0.05% $10,000
Featured CD 25 months 0.05% 0.05% $10,000
Featured CD 37 months 0.05% 0.05% $10,000
Fixed Term CD 28-179 days* 0.03% 0.03% $1,000
Fixed Term CD 6-11 months 0.03% 0.03% $1,000
Fixed Term CD 12-17 months 0.03% 0.03% $1,000
Fixed Term CD 18-23 months 0.03% 0.03% $1,000
Fixed Term CD 24-35 months 0.03% 0.03% $1,000
Fixed Term CD 36-47 months 0.03% 0.03% $1,000
Fixed Term CD 48-59 months 0.03% 0.03% $1,000
Fixed Term CD 60-119 months 0.03% 0.03% $1,000
Fixed Term CD 120 months 0.03% 0.03% $1,000

While holding periods for Bank of America CDs can extend up to 10-years, we recommend you avoid any term beyond five years. Because rates are capped at 0.05%, extending your maturity date beyond five years results in the same APY.

Does Bank Of America Charges Any Fees for Their CDs?

Bank of America does not charge any fees to open a CD, maintain an account, or transfer the balance to another institution. However, for CDs held in IRA accounts, a $50 charge will apply to transfer out your balance. A $125 fee will also apply if the bank is legally required to freeze or withhold your funds. While this will only happen with legal wrongdoing on your part, it’s still something to keep in mind.

Most important, pay attention to early withdrawal fees.

At Bank of America, if you withdraw money from your CD before the maturity date, you’re charged a fee that aligns with your holding period:

  • CDs with maturities of less than 90 days

You pay back interest earned on the amount you withdraw or pay seven days’ worth of interest on the total balance – whichever is greater.

  • CDs with maturities of 90 days to 1 year

You pay back 90 days interest on the amount you withdraw.

  • CDs with maturities of 1 year to 5 years

You pay back 180 days interest on the amount you withdraw.

  • CDs with maturities of 5 years or more

You pay back 365 days of interest on the amount you withdraw.

As you can see, early withdrawal penalties are quite substantial. Because of this, we recommend you match your CD maturity date with your time horizon to avoid any investment losses.

Will Bank Of America Automatically Renew My CD?

Yes.

After the maturity date is reached, Bank of America automatically will reinvest your funds into an identical CD with the same terms. However, if you want to opt-out, you have a grace period of 7 days. After it’s renewed to withdraw your funds won’t incur any early withdrawal fees.

How Do Bank Of America’s CD Rates Compare to Their Competitors?

Bank of America APYs is not among the highest you will find. But the institution remains one of the most trusted in America.

They are FDIC insured, which means that your money is in a safe place.

It’s true that because of the COVID, most high-yield accounts lower their rates, but we still can find higher-paying offers than Bank of America CDs.

What Other Saving Products Bank of America Offer?

Savings Accounts:

If you:

  • Maintain a minimum daily balance of at least $500 or;
  • Link your Bank of America Advantage Savings account to your Bank of America Advantage Relationship Banking or:
  • You become a Bank of America Preferred Rewards client:

You will avoid the $8 monthly fee.

However, all accounts go with 6 months free-fee period.

A minimum of $100 is required to open an account.

Like all other big banks, Bank of America APYs remains relatively low, below the national average. On average, you should expect 0.01% APY. However, if you become a Preferred Rewards Member, the fees will increase to 0.05%.

Learn more about the Bank of America Savings Account.

  • Checking Accounts

Checking accounts are the lowest paying bank products. All big banks checking accounts are below the national average. Bank of America’s checking accounts doesn’t make a difference.

Conclusion

If you hold other accounts at Bank of America, it can seem like a convenient option to add a CD account to the mix. However, if you’re willing to shop around, you’ll find that many other institutions, paying higher. Online banks offer CD rates that provide much more bang for your buck. And like Bank of America, all of the institutions above are FDIC insured, so you know your money is safe and protected.

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