Bank of America CD rates in June 2024 (2024)

Bank of America is the second largest bank in the United States, serving about 69 million consumer and small business clients. Because of its size, Bank of America offers just about any account you need — including dozens of certificate of deposit options.

The Charlotte, N.C.-based banking giant offers three types of CDs: featured, fixed term and flexible CDs. Within those three categories, you’ll find terms ranging from one month to 120 months. All deposits are insured by the FDIC up to $250,000 per depositor.

As with most big banks, Bank of America’s CD rates tend to be lower overall than the best CD rates out there. In most cases, its CD rates can’t even compete with the best savings account rates. However, Bank of America does offer a few competitive CD options, with the highest rates you’ll find anywhere.

What are certificates of deposit (CDs)

The U.S. Securities and Exchange Commission (SEC) describes a CD as a “savings account that holds a fixed amount of money for a fixed period of time.”

Terms can range from 90 days to ten years and you typically earn a fixed interest rate for the full term. When you want to redeem the CD, you get the principal balance plus any interest. You typically have to keep your money in for the full term or face a penalty.

CDs are an especially good option when interest rates are high because you can keep earning a tidy return no matter the broader rate environment.

Bank of America CD terms and options

Although Bank of America offers a massive lineup of CD options based on various terms and deposit amounts, there are only a handful of different annual percentage yields.

Note that almost all the CDs have early withdrawal penalties; this is a common feature of CDs across all banks.

Here’s a look at the available options, all interest compounds monthly.

Featured CDs

This is the best option if you want the highest return on your money. The minimum opening deposit on featured CDs is $1,000 and you will earn a fixed rate for the length of your term.

Note that when the CD matures, it will renew automatically into a standard CD with the same term. The standard CD will likely be at a much lower APY, since the featured CDs have promotional rates. Bank of America will send a notice before it renews, and you can elect to remove your funds from the CD at that time.

Standard CDs

Standard CDs are available with a minimum opening deposit of $1,000. Terms are 1 month to 120 months — and you can choose 120 different monthly terms. For example, you could choose a 57-month CD if you wanted.

These CDs automatically renew with the same term, but the APY may have changed. As with featured CDs, you’ll get a notice ahead of time, and you can decide if you want to let the CD roll over or if you’d like to withdraw the money.

Standard CD rates are 0.03% for all but the following terms:

• 3-month: 4.00% APY
• 4-month: 4.00% APY
• 5-month: 4.00% APY

Flexible CDs

Flexible CDs are different in that they allow you to remove your funds before the end of the term without penalty. They are only offered in a 12-month term and will renew automatically into a nine-month CD at whatever the current market rate is at that time.

The minimum deposit is $1,000 and it earns 4.00% APY.

Note that you will have a penalty of seven days’ worth of interest if you withdraw the funds within the first six days.

Comparing Bank of America CD rates to top-yielding banks

On most of its CDs, Bank of America lags well behind the top-yielding banks in terms of interest rates. The exception is the 4.90% APY offered on a 7-month featured CD, though its 4.50% APY on a 13-month featured CD is also competitive.

Here’s a look at some of the best CD rates in the industry:

How to calculate your earnings with Bank of America CDs

The earnings calculation on a Bank of America CD follows the same pattern as any other CD — it all depends on the APY, deposit amount, term length and how often interest is compounded.

Here’s an example of how CD earnings work: Suppose you deposited $10,000 into a 3-year CD with a 4% interest rate that compounds monthly. This is what the account balance might look like:

Based on this calculation, your initial deposit of $10,000 would have grown to $11,272.72 by the CD’s maturity date for a total return of $1,272.75.

Opening a Bank of America CD account

You can visit a Bank of America branch to open a CD or open one online at the bank’s website.

If you are a new Bank of America customer, you will be asked to provide personal information such as your name, address and Social Security number. All customers will have to make an initial deposit of at least $1,000.

Bank of America CD account safety and insurance

For nine years running, Bank of America was recognized as “having the Best Overall Identity Safety in Banking” by Javelin Strategy & Research, a provider of financial institution research.

All Bank of America deposits are insured by the FDIC up to $250,000 per depositor, per account type.

How CD ladder strategies work with Bank of America CDs

At Bank of America and other banks, a CD ladder is a series of accounts set up to mature at different points in time.

For example, suppose you have $3,000 to invest in a CD. With a CD ladder, you could divide your investment into $1,000 amounts deposited into CD accounts with 1-year, 2-year and 3-year terms, respectively. By creating a CD ladder, you’ll have regular opportunities to withdraw a portion of your investment without paying any penalties.

Alternatives to Bank of America CDs

If you are a Bank of America customer and want to keep your money there, you could also choose to put your money its savings account instead. Unfortunately, the interest rate is low, ranging between 0.01% and 0.04% APY.

If you want a CD and Bank of America CDs aren’t what you’re looking for, consider opening a CD at another bank. Quontic Bank has a six-month CD that is currently earning 5.05% APY and a two-year CD earning 4.50% APY, and you can get started there for only $500.

Marcus by Goldman Sachs has a 12-month CD that is earning 5.25% APY and a 9-month CD earning 5.20% APY. It also has a $500 minimum deposit requirement.

You could also check out brokered CDs. These CDs work differently; they are considered investments rather than savings accounts. If you want to withdraw the funds before maturity, you have to sell them on the market, you do not have the option to simply break the CD. However, you may earn higher returns than you would at a bank.

Early withdrawals and penalties

CDs typically have early withdrawal fees and CDs from Bank of America are no different.

Here are the penalties for early withdrawals on the featured and standard CDs.

You will only be penalized on the amount you are withdrawing. Also, you will not have to pay more interest than had been accrued.

Flexible CDs work differently. You don’t have an early withdrawal penalty on Flexible CDs unless you withdraw the funds in the first six days of the CD. In that case, you will be charged a full 7 days of interest, which means you’ll pay all the interest you’ve accrued and the balance due will be made up from your principal.