Bank of America CD Rates for February 2025

A certificate of deposit (CD) is a relatively low-risk investment that is insured up to $250,000 by the FDIC. However, in exchange for that low-risk you must agree to specific term periods when investing in a CD.

CD Terms. Typical terms can range from several months up to 5 years. Once a CD reaches maturity you generally have three options:

1. Withdraw your money and put it in another account.
2. Withdraw your money and open a different CD.
3. Allow your CD to renew.

What term should you choose. Choosing a CD depends on when you need the money. If you need your money soon, consider a CD with a shorter term. But if you’re saving for retirement or a future purchase, a longer term CD may be more beneficial.

You lose interest if you withdraw early. The economic environment must be taken into consideration when choosing a CD. If it seems that interest rates may be on the rise you don't want to get locked into a CD that charges a penalty to withdraw funds early which means losing some or all the interest you earned.

Why Bank of America CD Rates Are So Low

Larger banks like Bank of America really don't have to compete for new customers;  they already have a large share of the consumer market with approximately 67 million customers.

Another reason Bank of America CD rates are so low is that financial institutions profit when the rate on the money they lend out is higher than the rate they pay customers who deposit money into savings vehicles like CDs.

You can find a better deal on CD rates than what Bank of America offers with online banks that are actively competing for new customers.

Plus, online banks can offer higher rates because they don't incur the daily operating costs of running branch locations. That savings is passed onto customers in the form of high-yield savings accounts and totally free checking accounts.