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Bank of America’s featured CD accounts are available in five CD terms, ranging from seven months to 37 months. The bank’s CD rates tend to be much lower than the best CD rates from online banks: BofA offers 0.05% APY for all balances and terms on its featured CDs, with a deposit of $10,000 minimum opening.
Bank of America also offers standard term CDs, which let you choose any term from 28 days to 10 years. Standard term CDs have a minimum deposit of $1,000 and offer an APY of 0.03% on all terms and balances.
Here’s a look at Bank of America’s CD rates. This article focuses on Bank of America’s featured CDs, which offer a higher APY and require a higher minimum deposit. Rates are accurate as of June 28, 2022.
Overview of Bank of America CDs
Bank of America featured CDs require a minimum opening balance of $10,000, which is relatively high considering the low rates this bank pays. Many other banks pay higher APYs while requiring a lower minimum deposit or even no minimum.
Notably, Bank of America featured CDs arrive on odd terms, usually a month longer than standard. For example, the bank offers a seven-month CD, although a six-month term is more common. Instead of a 12 month CD, it offers a 13 month CD.
Interest on bank CDs is compounded monthly and credited to your account monthly. You can also choose to pay interest at maturity or at certain intervals.
If you withdraw your money from the CD before the end of the term, you will have to pay an early withdrawal penalty. For CD terms of 90 days to 12 months, the early withdrawal penalty is 90 days interest on the amount withdrawn. For CD terms of 12 to 60 months, the early withdrawal penalty is 180 days interest on the amount withdrawn.
How Much Can You Earn With Bank of America CD Rates?
Since Bank of America CD rates are relatively low across all tenors, don’t expect a big return. Here’s what you can earn with Bank of America CDs with a $10,000 investment and earnings compounded monthly:
Comparison of Bank of America CDs
Yields on Bank of America CDs are well below those of the best CD rates. This bank’s rates are also significantly lower than the national average CD rates, according to the FDIC.
You may find a better deal on CD rates than what Bank of America offers. Especially considering its minimum deposit requirement of $10,000, this bank’s CDs are far from competitive – $10,000 is a big commitment in exchange for a very low return.
It’s a great reminder to shop around and do your research on CD pricing. Your bank or banks in your immediate geographic area may not offer the best CD rates, so consider online options as well. Compare rates from multiple banks and credit unions and see who can give you the best deal so you can get the best possible return on your investment.
About Bank of America
Bank of America is a full-service national bank with 240 years of history, and it is the second largest US bank by assets. It offers 4,100 branches, an online banking platform and a popular mobile app. Bank of America provides personal, business, and corporate banking products and services.
Frequently Asked Questions (FAQ)
What are the alternatives to CD backup?
If you want a safe place to keep your savings, one option is a savings account. Savings accounts are FDIC insured, but these demand deposit accounts do not have early withdrawal penalties. And if you choose one of the best online savings accounts, you might get a better APY than with a CD.
Do all CDs charge an early withdrawal penalty?
It depends on the type of CD and the financial institution. Some banks offer penalty-free CDs, which are a type of CD that do not charge an early withdrawal penalty. Depending on the bank, the APY on penalty-free CDs may be lower than a standard CD – you may have to agree to accept a lower return in exchange for more cash.
What is a CD Ladder Strategy?
A CD ladder is a savings strategy that helps you maximize your return and provide more liquidity by opening multiple CDs with different terms and maturity dates. The goal is to take advantage of higher interest rates and lock in a variety of CDs that give you a range of returns over time. Instead of putting all your eggs in one basket with a CD and a fixed rate, a CD ladder can help you take advantage of higher yields and avoid early withdrawal penalties. To build a CD ladder, do your research to find the best rates, terms, and minimum deposits.