Bank of America offers two certificate of deposit account types, its Featured CD and Standard Term CDs. The Featured CD is a 12-month term while the Standard Term CDs range from one to 120 months. You will have to meet a minimum deposit requirement for both accounts, with the Featured CD having a much higher requirement. Luckily, you won’t have to worry about a monthly or annual service fee with these Bank of America CDs.
Bank of America’s Featured CD comes only as a 12-month account. Despite being billed as a Featured account, though, this CD does not offer any special perks. The account does not offer a favorable interest rate either.
You will need to meet a high minimum deposit of $10,000 to open Bank of America’s Featured CD. You don’t need to worry about paying a monthly or annual fee on this account, though.
|Featured CD||Minimum Deposit||APY|
Standard Term CD
If you’re looking for a lower minimum deposit or to create a CD ladder, Bank of America’s Standard Term CDs are your better option. You can open accounts from one-month to 120-months long with at least $1,000 to start.
Again, these CD rates aren’t very high. Only the last tier of 60 - 120 months has an APY of 1%, with all others having much lower rates.
|Standard Term CD||Minimum Deposit||APY|
|1 - 11 Month||$1,000||0.03%|
|12 - 17 Month||$1,000||0.05%|
|18 - 23 Month||$1,000||0.07%|
|24 - 35 Month||$1,000||0.10%|
|36 - 47 Month||$1,000||0.55%|
|48 - 59 Month||$1,000||0.65%|
|60 - 120 Month||$1,000||1.00%|
Consider opening an 11-Month No-Penalty CD with CIT at 2.05% APY with a $1,000 minimum opening deposit. This account offers a balance between a great fixed rate and flexible money access.
Overview of Bank of America CDs
As a big bank with thousands of physical branches, Bank of America does not offer high-earning interest rates on its bank accounts. Its CDs are no exception, with low rates for every available term. Even its Featured CD does not come close to 1%. To earn at a 1% APY, you’ll need to open a Standard Term CD from 60 to 120 months.
You won’t ever have to worry about paying an annual or monthly fee to own a Bank of America CD. You do have to be careful to not make any early withdrawals from your CDs, though. CDs are meant to grow undisturbed for their set term length. Making any early withdrawals will incur a heavy penalty.
Bank of America CDs with terms lasting less than 90 days incur a penalty of all interest earned on the amount withdrawn or an amount equal to seven days’ interest on the amount withdrawn, whichever is greater. CDs between 90 days and 12 months charge a penalty that equals the amount of 90 days’ interest on the amount withdrawn. For CDs with terms of 12 to 60 months, the penalty is an amount equal to 180 days’ interest on the amount withdrawn. Finally, CDs of 60 months or longer incur a penalty of 365 days’ worth of interest on the amount withdrawn.
How Much You Earn With Bank of America Certificate of Deposits Over Time
Unfortunately, Bank of America has some of the lowest CD rates out there. Your money won’t see much growth unless you open a 60-month or longer Standard Term CD. Even then, you’ll have to wait five years or more to benefit from your earnings.
Bank of America also compounds interest monthly. This means that the money you deposit today will grow in one month, then that new balance will grow the next month and so on. While this compounding frequency is better than yearly, it allows Bank of America to avoid paying out too much by compounding daily, for example.
The numbers below reflect what your final account balance would be at the end of each CD term, according to your initial deposit.
|Initial Deposit||12-Month Featured CD||6-Month Standard Term CD||12-Month Standard Term CD||60-Month Standard Term CD|
How Bank of America CDs Rates Compare to Other Banks
As you can see below, Bank of America CD rates don’t even come close to the rates of other banks, namely online banks like Marcus by Goldman Sachs and Ally Bank. Ally’s one-year CD 2.00% APY outperforms Bank of America’s 0.05% substantially. Plus, Ally Bank High Yield CDs earn interest according to balance tiers. This means that a higher opening deposit can earn at a higher rate. The rates given below represent the lowest balance tier.
Bank of America’s closest big bank competitor is Chase. Here you can see that Chase offers incredibly low standard rates. Chase does, however, offer the chance to earn better relationship rates when you link your CD to a Chase checking account and have higher balances.
|CD Account||Bank of America||Chase||Ally Bank||Marcus by Goldman Sachs|
Should You Get a Bank of America CD Account?
If you’re looking for high returns on a timed deposit, a Bank of America CD won’t be the account for you. Its interest rates are just too low to yield much growth. Your best chance at growth is to open a Standard Term CD of 60 months or more. The downside to this, however, is you have to wait at least five years to withdraw all that extra cash. It may make more sense to deposit that $1,000 or more into another account elsewhere that has a higher interest rate.
However if you are an existing BoA customer and you’d prefer to keep all your banking needs at one company, Bank of America does offer a number of CD terms for you to choose from.
For a great fixed rate and flexible money access consider opening an 11-Month No-Penalty CD with CIT at a 2.05% APY with a $1,000 minimum opening deposit.