Capital One CD Rates & Terms | Open a Certificate of Deposit

Dec 16, 2025
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When it comes to saving and growing your money with minimal risk, Certificates of Deposit (CDs) are one of the most secure investment choices available. Offered by banks and credit unions, CDs provide fixed interest rates over a set term, helping savers lock in returns while keeping their principal safe. Among the various financial institutions offering CDs, Bank of America stands out due to its size, reach, and established reputation. However, understanding Bank of America CD rates in detail is essential before investing.

In this comprehensive guide, we’ll explore what Bank of America CD rates are, how they compare to other financial institutions, what types of CDs are available, and whether they’re worth it for your savings strategy in 2025 and beyond.

What Is a Certificate of Deposit (CD)?

A Certificate of Deposit (CD) is a savings product that holds a fixed amount of money for a fixed period of time. In return, the bank pays interest at a predetermined rate. When the CD matures, the investor receives their original deposit plus the interest earned. CDs are seen as low-risk investments and are especially popular among conservative investors or those with short- to medium-term savings goals.

Some features of CDs include:

Fixed interest rates
Specific terms (ranging from a few months to several years)
Early withdrawal penalties
FDIC insurance (up to $250,000 per depositor, per bank)

Overview of Bank of America

Bank of America is one of the largest banking institutions in the United States, offering a wide range of financial services including savings accounts, checking accounts, investment services, credit cards, home loans, and CDs. Due to its nationwide presence and technological infrastructure, many customers find it convenient to use Bank of America for multiple financial needs, including CDs.

Understanding Bank of America CD Rates

Bank of America offers CDs under the category of Fixed Term CDs, which provide a secure and predictable way to earn interest on your deposits.

As of 2025, Bank of America CD rates are relatively modest compared to online banks or credit unions, but they offer other benefits such as:

Accessibility to branches
Relationship benefits for existing customers
FDIC-insured savings

CD rates typically vary based on:

The amount you deposit
The term length
Your status (Preferred Rewards members may qualify for better rates)

Bank of America generally offers CD terms ranging from 28 days to 10 years. However, commonly advertised terms include 6 months, 12 months, and 24 months.

Factors Affecting Bank of America CD Rates

Federal Reserve Interest Rate Policy: The Fed plays a major role in determining interest rates across the economy. When the Fed raises rates to combat inflation, banks often follow suit with higher CD rates.
Deposit Amount: Larger deposits may qualify for better rates, although Bank of America may not scale rates as aggressively as some online competitors.
Term Length: Generally, the longer the term, the higher the interest rate. But that’s not always the case, especially when the interest rate environment is uncertain or inverted.
Customer Loyalty (Preferred Rewards Program): Bank of America’s Preferred Rewards customers—those who maintain a qualifying balance in combined Bank of America and Merrill accounts—may be eligible for rate boosters.
Promotional Offers: Occasionally, Bank of America may offer limited-time promotional CDs with higher-than-usual rates to attract new customers or deposits.

Pros of Bank of America CDs

FDIC Insurance
Your deposits are insured up to $250,000, which provides peace of mind for conservative investors.
Convenience and Accessibility
With thousands of branches and ATMs across the U.S., Bank of America offers ease of access.
Online Management
Customers can open and manage their CDs online, making it simple to check balances and maturity dates.
Relationship Bonuses
Bank of America may offer better rates to Preferred Rewards clients, which can add value for loyal customers.
Trust and Reliability
As a well-established financial institution, Bank of America offers reliability and long-term stability.

Cons of Bank of America CDs

Lower Interest Rates Compared to Online Banks
While Bank of America offers safety and convenience, its rates often trail those of online banks like Ally, Marcus by Goldman Sachs, or Capital One.
High Minimum Deposit Requirement
Some CDs at Bank of America require a minimum deposit of $1,000 or more, which might be a barrier for small savers.
Early Withdrawal Penalties
Accessing your funds before the CD matures will trigger penalties that can wipe out any earned interest.
Limited CD Options
Bank of America’s selection of CDs is not as diverse as that of some competitors, especially those offering “no-penalty CDs” or “bump-up CDs.”
Not Competitive in a High-Rate Environment
In a climate where interest rates are high, Bank of America's relatively conservative approach may not offer the best return on your investment.

Who Should Consider Bank of America CDs?

Existing Bank of America Customers
If you already bank with BofA, opening a CD through the same institution may be convenient and may offer relationship benefits.
Conservative Investors
Those seeking safety over yield may find BofA CDs suitable, especially with FDIC protection.
Short-Term Savers
If you need to park money safely for a short time (e.g., 6–12 months), Bank of America’s short-term CDs may meet your needs.
Tech-Averse Investors
Customers who prefer in-person banking or who are uncomfortable managing accounts online may prefer the brick-and-mortar presence of Bank of America.

How to Open a CD at Bank of America

Opening a CD with Bank of America is a straightforward process. Here are the typical steps:

Choose the Term
Decide how long you want to commit your money. Keep in mind that longer terms usually (but not always) offer better rates.
Select the Deposit Amount
You’ll need to meet the minimum deposit requirement, which usually starts at $1,000.
Apply Online or In-Person
Existing customers can open CDs via the Bank of America website or mobile app. New customers may need to visit a local branch or complete a more detailed online application.
Fund the CD
Transfer money from an existing BofA account or another bank to fund your CD.
Track Maturity and Renewal
Mark the maturity date in your calendar. If you don’t provide instructions, Bank of America may automatically roll over the CD into a new term, possibly at a different rate.

Comparing Bank of America CDs to Online Banks

Online banks typically offer higher CD rates because they have lower overhead costs. For example:

Ally Bank, Capital One, or Synchrony may offer 12-month CDs with APYs over 4.00%–5.00%.
Bank of America’s equivalent CD might only offer rates closer to 0.03%–0.05% for non-preferred customers.

This significant gap can make a huge difference over time, especially for large deposits.

Tips to Maximize Your CD Investment

Laddering Strategy
Instead of putting all your money into one CD, consider spreading it across multiple CDs with different maturity dates. This approach provides regular access to funds and can help you take advantage of rising rates.
Compare Rates Before Investing
Always shop around and compare rates from multiple banks, including online-only institutions and credit unions.
Monitor Inflation
If inflation is high, the real return on your CD may be negative. In such cases, you may want to keep terms short.
Avoid Automatic Renewals
Keep track of your maturity date and shop around for better rates rather than letting the CD auto-renew.

Are Bank of America CDs Worth It?

The answer depends on your financial goals.

Pros:

Trustworthy bank
Convenience for existing customers
FDIC insurance
Simple online management

Cons:

Much lower yields than online banks
Fewer flexible CD options
High early withdrawal penalties

If you prioritize safety and convenience over yield, then Bank of America CDs may still be worth it. However, for higher returns, exploring online banks or alternative savings vehicles might be more beneficial.

Alternatives to Bank of America CDs

If Bank of America's rates don’t meet your expectations, consider the following options:

High-Yield Savings Accounts: Offer flexibility with better-than-average interest.
Money Market Accounts: Typically offer slightly higher returns with some check-writing privileges.
Treasury Bills (T-Bills): Backed by the U.S. government, T-bills offer short-term investment opportunities with minimal risk.
Online Bank CDs: Usually provide higher APYs, though without physical branches.

Final Thoughts

Bank of America offers safe, straightforward CD options for conservative investors and loyal customers. However, their CD rates are often lower than the national average, especially when compared to online competitors. While convenience and security are strong points, the yields may not satisfy growth-focused investors.

Before locking in your money, evaluate your goals, compare rates across institutions, and consider alternatives like high-yield savings accounts or online bank CDs. Always read the fine print, especially regarding penalties and automatic renewals, to make an informed decision.

FAQs

Q1. What is the minimum deposit required for a Bank of America CD?
Most Bank of America CDs require a minimum deposit of $1,000, but this can vary depending on the term and type of CD. It's always best to check the latest details on their official website or at a local branch.

Q2. Are Bank of America CDs insured?
Yes, all Bank of America CDs are FDIC-insured up to $250,000 per depositor, per bank. This provides protection for your principal investment in case of bank failure.

Q3. How can I get a better rate on a Bank of America CD?
You may qualify for a slightly higher rate if you're a member of the Bank of America Preferred Rewards program. Additionally, keeping a higher deposit amount and choosing longer-term CDs might offer better rates, although their overall yield may still be below market-leading options.