Choosing to keep your money in a Bank of America savings account may seem convenient, but it could cost you nearly $5,000 in lost interest over the next decade—simply by earning virtually zero APY compared to high‑yield alternatives. According to a new analysis, Bank of America’s Advantage Savings account pays just 0.01% APY, rising to 0.04% for Preferred Rewards members, meaning someone with $8,000 deposited earns a mere 80 cents to $3.20 per year The Sun+1The Motley Fool+1.
Meanwhile, high-yield savings accounts (HYSAs) currently offer between 4.00% and 5.00% APY, with top providers like Varo and Axos offering rates up to 5.00% APY Investopedia+4Investopedia+4Fortune+4. This translates to roughly $352 per year on an $8,000 balance—and when compounded over 10 years, that could amount to nearly $5,000 more in total interest compared to Bank of America.
Key Insights
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As of mid‑2025, the national average savings rate is about 0.38%, while Bank of America pays effectively 0.01%–0.04% to savers U.S. News+12NerdWallet+12Investopedia+12NerdWallet.
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“Leaving your savings in a traditional account like BofA,” warns Investopedia, “could result in earning only a few dollars a year in interest, while better options offer hundreds” Investopedia+1The Sun+1.
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Even modest balances show stark differences: at 4.5% APY, $8,000 earns ~$360 annually vs. sub-$1 at BofA—making HYSAs an obvious choice for most savers Forbes+8Reddit+8The Sun+8.
Why the Gap?
Major banks like Bank of America have taken advantage of the Fed’s high-rate environment by offering depositors much lower rates than what the Fed itself pays—averaging only 2.2% APY paid to savers, despite benchmark rates above 5% Financial Times+1Investopedia+1.
This disparity allows banks to pocket the difference, earning substantial windfalls while customers miss out on potential returns.
What You Could Earn Instead
If you moved your $8,000 savings into an account paying 4.5% APY, you’d earn approximately $360 in interest per year versus under $1 at Bank of America. Over a decade, that adds up—compounding annually—to a difference of nearly $5,000 InvestopediaInvestopedia.
Even accounts offering 4.30% APY like LendingClub or Axos would yield substantial gains compared to BofA’s practically zero return NerdWallet+1The Sun+1.
What You Can Do
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Check your current APY—log into your Bank of America account and confirm the rate you’re earning.
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Compare HYSA options—look for FDIC-insured accounts offering 4.00%+ APY, no or low fees, and easy access to your funds. Many require minimal balance or setup.
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Switch or split your savings—keep your checking and daily banking at Bank of America if desired, but move most of your savings to a high-yield account to maximize earning.
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Watch for promotions—some HYSA providers like SoFi offer signup bonuses up to $300, further boosting returns NerdWallet+6The Sun+6bankofamerica.com+6.
Bottom Line
Staying loyal to a major bank for savings convenience can silently erode your wealth. With interest rates on traditional savings near zero, you’re likely losing thousands in potential interest over a decade. A simple switch to a high-yield savings or money market account earning 4%‑5% APY offers hundreds of dollars more each year, and can net you almost $5,000 extra over ten years—while still retaining access and FDIC protection.
