What Bank of America pays on CDs right now

Bank of America offers certificates of deposit (CDs) with rates that change based on how long you lock your money away and current market conditions. The rates vary by term length — typically ranging from 3 months to 5 years — and they shift weekly or more often as the Federal Reserve adjusts its benchmark rate.

You can check Bank of America's current CD rates on their website or by calling 1-800-432-1000. The rates you see online are the ones available to new customers opening accounts today. Your actual rate depends on the specific term you choose and when you open the account, since rates move constantly.

Bank of America CDs are FDIC insured up to $250,000 per account holder, per bank, per ownership category. This means if the bank fails, the federal government guarantees your principal and earned interest up to that limit.

Key Takeaways

  • Bank of America CD rates change weekly and depend on the term length you choose, from 3 months to 5 years.
  • You can view current rates online or by phone, and the rate you lock in is the rate you receive for the entire CD term.
  • If you withdraw money before the CD matures, Bank of America charges an early withdrawal penalty that reduces your earnings or principal.
  • Bank of America also offers no-penalty CDs that let you withdraw without a fee, though the rate is typically lower than standard CDs.
  • Your CD is FDIC insured up to $250,000, protecting your money if the bank fails.

How CD terms and rates connect

Shorter-term CDs (3 months to 1 year) usually pay lower rates because you're committing your money for less time. Longer-term CDs (3 to 5 years) typically pay higher rates to compensate you for locking in your funds longer. The exact difference between a 1-year and a 5-year CD rate at Bank of America can be substantial, but the gap changes as market conditions shift.

When you open a CD, the rate you receive is fixed for the entire term. If rates rise after you open your CD, your rate stays the same. If rates fall, you're protected by the higher rate you locked in. This is why timing matters — opening a CD when rates are high protects you if they drop later.

Early withdrawal penalties and what they cost

Bank of America charges an early withdrawal penalty if you take money out before your CD matures. The penalty amount depends on the term length of your CD. For example, a 1-year CD might have a penalty of 3 months' interest, while a 5-year CD might have a penalty of 1 year's interest. The longer the term, the larger the penalty.

The penalty is deducted from your earnings first. If you haven't earned enough interest yet, the penalty comes out of your principal. This means withdrawing early can leave you with less money than you deposited. Bank of America's website lists the specific penalty for each CD term when you're shopping for rates.

No-penalty CDs as an alternative

Bank of America offers no-penalty CDs that let you withdraw your full deposit without a fee before the maturity date. The trade-off is that no-penalty CDs pay a lower interest rate than standard CDs with the same term. This option makes sense if you're uncertain whether you'll need the money before the CD matures.

No-penalty CDs typically have shorter terms (6 months to 1 year) and are useful for people building an emergency fund or saving for a goal they might need to access sooner than expected. The lower rate reflects the bank's lower risk — they know you can leave without penalty.

How to open a Bank of America CD

You can open a CD online through Bank of America's website, by phone at 1-800-432-1000, or in person at a branch. You'll need to choose your term length, decide whether you want a standard or no-penalty CD, and transfer funds from a Bank of America checking or savings account to fund it.

The minimum deposit varies by CD type and term. Standard CDs often require $500 to $1,000 minimum, though this can change. No-penalty CDs may have different minimums. Check the current requirements on Bank of America's website or ask when you call, since minimums are not fixed.

Once your CD opens, you receive a maturity date. Bank of America will send you a notice before that date telling you what happens next — typically, you can renew the CD at the current rate, transfer the money to another account, or let it sit in a non-interest-bearing account if you don't act.

Comparing Bank of America CDs to other banks

Bank of America's CD rates are often lower than rates offered by online banks or credit unions. Online banks like Marcus, Ally, and American Express typically pay higher rates because they have lower overhead costs. Credit unions sometimes offer competitive rates to members. If you're shopping for the best CD rate, compare Bank of America's current offerings to at least two other institutions.

The trade-off is convenience and relationship. If you already bank with Bank of America, opening a CD is simple — your funds are in one place, and you can manage everything through your existing account. If rate is your only concern, a higher-paying CD elsewhere might make more sense mathematically, even if it requires opening an account at a new bank.

What happens when your CD matures

When your CD reaches its maturity date, Bank of America stops paying interest. You then have a grace period (usually 7 to 10 days, though this varies) to decide what to do. During this window, you can renew the CD at the current rate, transfer the money to a checking or savings account, or withdraw it entirely.

If you don't act during the grace period, Bank of America typically moves the money to a regular savings account earning a much lower rate. This is why it's important to plan ahead — set a reminder a week before maturity so you can make an intentional choice rather than defaulting to a low-earning account.

Frequently Asked Questions

Can I add money to a Bank of America CD after I open it?

No. CDs are fixed-term products. Once you open one, you cannot add more money to that specific CD. If you want to invest additional funds, you would need to open a separate CD or use a savings account.

What's the difference between a CD and a savings account at Bank of America?

A CD locks your money away for a set term and pays a higher rate in exchange. A savings account lets you withdraw anytime without penalty but pays a lower rate. CDs are better for money you won't need soon; savings accounts are better for emergency funds.

Do I pay taxes on CD interest from Bank of America?

Yes. Interest earned on a CD is taxable income. Bank of America will send you a 1099-INT form at tax time if you earned $10 or more in interest. You report this on your tax return.

Can I open multiple CDs at Bank of America?

Yes. You can open as many CDs as you want, and each one is separately FDIC insured up to $250,000. This is a way to spread money across multiple terms or ladder your CDs so they mature at different times.

What happens if Bank of America goes out of business?

Your CD is protected by FDIC insurance up to $250,000. The federal government guarantees you'll receive your principal and all earned interest, even if the bank fails. You would be contacted by the FDIC or a successor bank about accessing your funds.