What Bank of America CDs offer right now

Bank of America offers certificates of deposit (CDs) with rates that change based on how long you lock your money away and how much you deposit. As of early 2024, their CD rates range from around 4% to 5.35% depending on the term length — but these rates shift regularly, sometimes weekly. The bank does not publish a single rate; instead, each term has its own rate, and rates for new CDs differ from what existing CD holders locked in.

Bank of America CDs come in term lengths from 3 months to 10 years. Shorter terms (3 to 6 months) typically pay less. Longer terms (2 to 5 years) usually pay more. The bank also offers a CD ladder option through their website, which lets you open multiple CDs at different term lengths so money matures at staggered intervals.

To see the current rates Bank of America is offering, you need to log into your account or call their customer service line. Rates are not listed on their main website without starting the CD opening process. If you do not have a Bank of America account, you can open one online, but you will still need to check rates directly with the bank.

Key Takeaways

  • Bank of America CD rates currently range from around 4% to 5.35% depending on term length, but rates change regularly and are not posted publicly without logging in.
  • Shorter CD terms (3 to 6 months) pay lower rates, while longer terms (2 to 5 years) typically pay higher rates.
  • You can view current rates by logging into your Bank of America account online or by calling their customer service number.
  • Bank of America charges an early withdrawal penalty if you take money out before the CD matures, ranging from a few months of interest to the full interest earned depending on the term.
  • Other banks and online-only banks often offer higher CD rates than Bank of America for the same term length.

How Bank of America CD penalties work

If you withdraw money from a Bank of America CD before it matures, the bank charges an early withdrawal penalty. The penalty amount depends on the CD term length. For CDs with terms of 12 months or less, the penalty is typically 3 months of interest. For CDs with terms longer than 12 months, the penalty is usually 6 months of interest.

This means if you have a 2-year CD earning $200 in annual interest and you withdraw early, you lose 6 months of that interest — $100. The bank deducts the penalty from your CD balance, so you get back your original deposit minus the penalty. In some cases, if the penalty exceeds the interest you have earned, the bank takes the difference from your principal.

The penalty applies whether you withdraw all the money or part of it. Once the CD matures, you can withdraw without penalty, though the bank will ask what you want to do with the money — renew the CD at the current rate, move it to savings, or take it out entirely.

Comparing Bank of America rates to other banks

Bank of America's CD rates are typically lower than what online banks and credit unions offer for the same term. Online banks like Marcus, Ally, and American Express often pay 4.75% to 5.35% on 1-year CDs, while Bank of America may offer 4.5% to 5.0% for the same term. The difference compounds over time — on a $10,000 CD, a 0.5% rate difference means roughly $50 more per year in interest.

The trade-off is convenience and familiarity. If you already bank with Bank of America and use their checking account, opening a CD there means you do not need to set up accounts elsewhere or transfer money between banks. You can manage everything in one place. For people who prioritize the highest possible rate, though, shopping around takes 15 minutes and can add hundreds of dollars in interest over a CD's lifetime.

Credit unions sometimes offer competitive CD rates as well, especially if you are a member. If you belong to a credit union, ask what rates they offer before committing to Bank of America.

How CD terms and rates connect

Bank of America follows the standard CD structure: longer terms pay higher rates, shorter terms pay lower rates. This is because the bank wants to lock in your money for longer and is willing to pay more interest to do so. A 3-month CD might pay 4.0%, a 1-year CD might pay 4.75%, and a 5-year CD might pay 5.35%.

The relationship is not linear. The jump from 3 months to 6 months might be 0.25%, but the jump from 2 years to 5 years might only be 0.15%. This is because the market for longer-term rates is less predictable, so banks do not always increase rates as steeply for very long terms.

If you are unsure which term fits your situation, think about when you will need the money. If you know you will not touch it for 2 years, a 2-year CD locks in a rate and removes the temptation to withdraw early. If you might need it sooner, a shorter term is safer even if the rate is lower.

Minimum deposit amounts and account requirements

Bank of America's minimum CD deposit is typically $1,000, though this can vary by CD type and current promotions. Some special CDs or promotional offers may have different minimums. When you start the CD opening process, the bank will show you the minimum for that specific CD.

You do not need to have an existing Bank of America checking or savings account to open a CD, but you do need to be a customer. If you do not have an account, you can open one online at the same time you open the CD. The process takes about 10 minutes and requires your Social Security number, address, and a way to fund the account (bank transfer, debit card, or check deposit).

Once your CD matures, Bank of America will automatically renew it at the current rate unless you tell them otherwise. You have a grace period (usually 7 to 10 days after maturity) to change your mind and withdraw the money or move it elsewhere without penalty.

How to check Bank of America CD rates

To see current rates, log into your Bank of America account online or through the mobile app. Navigate to the Savings or Investments section and look for CDs. The bank will show you available terms and the rate for each one. Rates update regularly, so the rate you see today may be different tomorrow.

If you do not have an account, you can call Bank of America customer service at 1-800-432-1000 and ask about current CD rates. A representative can quote you rates for different terms and help you open a CD over the phone. You can also visit a local branch, though branch staff may not have the most up-to-date rates on hand.

Before you commit, write down the rate, term, and maturity date. Bank of America will send you a confirmation email and a paper statement showing these details. Keep this for your records so you know when the CD matures and what rate you locked in.

Tax considerations for CD interest

The interest you earn on a Bank of America CD is taxable income. The bank will send you a 1099-INT form in January showing how much interest you earned during the previous year. You report this on your federal tax return as ordinary income, and it is taxed at your regular income tax rate.

This matters because it reduces the real return on your CD. If you earn $500 in interest and you are in the 24% tax bracket, you owe roughly $120 in federal taxes on that interest. Your actual take-home is closer to $380. Some people open CDs in tax-advantaged accounts like IRAs to avoid this, though there are contribution limits and withdrawal rules for those accounts.

If you are retired or in a lower tax bracket, the tax impact is smaller. If you are in a high tax bracket, it is worth factoring into your decision about whether a CD's rate is worth locking up your money.

Frequently Asked Questions

Can I withdraw money from a Bank of America CD before it matures?

Yes, but you will pay an early withdrawal penalty. For CDs with terms of 12 months or less, the penalty is 3 months of interest. For longer terms, it is 6 months of interest. The bank deducts the penalty from your CD balance, so you may end up with less than your original deposit if the penalty exceeds the interest earned.

What happens when my Bank of America CD matures?

Bank of America automatically renews your CD at the current rate unless you tell them otherwise. You have a grace period (usually 7 to 10 days) after maturity to withdraw the money, move it to savings, or let it renew. If you do nothing, it renews automatically.

Are Bank of America CDs FDIC insured?

Yes. Bank of America is an FDIC-insured bank, so your CD is covered up to $250,000 per depositor per bank. If you have multiple CDs at Bank of America, the total across all of them is insured up to $250,000. If you exceed that amount, the excess is not covered.

How often do Bank of America CD rates change?

Bank of America updates CD rates regularly, sometimes weekly or even daily depending on market conditions. The rate you lock in when you open the CD stays the same for the entire term. New CDs opened later will have different rates.

Can I open a CD online with Bank of America?

Yes. You can open a CD through your Bank of America online account or mobile app. If you do not have an account, you can open one online and then open a CD in the same session. The process takes about 10 minutes and requires your Social Security number and a way to fund the account.