When Bank of America rolled out their Bank of America Preferred Rewards program they were doing something that not many banks have done before. They were actually offering some real rewards for the people who make up the majority of the money that they are holding. The program is for customers who are able to place a minimum of $20,000 in select accounts at a Bank of America Bank. By doing so, you are able to reap the benefits of extra rewards that range from increased interest rates on savings, higher rewards from your Bank of America credit card, reduced maintenance fees on mortgage costs, lower interest on loans, and more.  Looking from the outside in, this program looks like a no brainer. What you don’t realize, is that there is an alternative option that can save you a lot more money, with a lot less work. 

First, lets look at all of the details for the Bank of America Preferred Rewards Program. 

If you average a balance of $20,000 - $49,999 over a 3 month period in a qualifying Bank of America or Merrill Lynch account you will qualify for the Gold Tier of the Bank of America Rewards Program. 

See what Bank of America credit cards and signup bonuses are be targeted towards your credit profile for free with our partnered Card Match Program. 

The Gold Tier Includes

If you average a balance of $50,000 - $99,999 over a 3 month period in a qualifying Bank of America or Merrill Lynch account you will qualify for the Platinum Tier of the Bank of America Rewards Program.

The Platinum Tier Includes

If you average a balance of $100,000+ over a 3 month period in a qualifying Bank of America or Merrill Lynch account you will qualify for the Platinum Honors Tier of this Bank of America Rewards Program. 

The Platinum Honors Tier Includes

Anyone with this amount of money in any bank should come to expect treatment like this, but as this is not normally the case, it is refreshing that Bank of America is offering benefits of this kind. 

With all of the rewards and benefits laid out, lets see what the savings are when actual numbers are figured into the equation. We will use the absolute base level of this program, which is $20,000, and determine how much money you could actually save. 

For this situation, we will use the Bank of America Cash Rewards credit card as our example for the bonus credit card rewards. The Bank of America Cash Rewards Credit Card offers 3% cash back on gas, 2% cash back on groceries, and 1% cash back on everything else. Everyone also qualifies for a 10% cash back bonus when you redeem your rewards into a BOA checking or savings account. This Bank of America card caps your combined gas a grocery cash back bonus at $1,500 per quarter. For our equation we will assume $750 is spent on gas per quarter, $750 is spend on groceries, and $750 is spent on other purchases. 

We will add in the reduction in mortgage fees and also assume that an auto loan of $20,000 has been taken out at 1.99% APR over 36 months.  

The only amount that could really change is the amount that the auto loan is for. As said before, we will assume a $20,000 loan for our example and at the end will get a grand total of savings for each tier in the Bank of America Preferred Rewards Program. 

Gold Tier 

Rewards Money Market Savings Account

Bank of America Cash Rewards Credit Card

Bank of America Mortgage

Bank of America Auto Loan

Total Savings for $20,000 in deposits Gold Tier Members: $255

Total Savings for $50,000 in deposits Platinum Tier Members: $518

Total Savings for $100,000 in deposits Platinum Honors Tier Members: $871

If you are an active trader and/or utilize non Bank of America ATM’s, then, your savings will increase even more. Also, as you see, if you are able to put even more cash away to qualify for the Platinum and Platinum Preferred Tiers, you will see even more savings. 

Now, the easier way to possibly save/earn a lot more money is with an online savings account. How is this possible? The answer is simple. Online banks do not have the overhead that traditional banks do because they do not have to staff and support hundreds of buildings all over the country. In turn, they pass these savings onto their customers in the form of interest.

Here is a list of online banks and the current interest rate they offer on their savings products. 

Total after interest with $20,000 in an online savings account: $20,184

Total after interest with $50,000 in an online savings account: $50,460

Total after interest with $100,000 in an online savings account: $100,920

Here is the break down of the Bank of American Preferred Rewards Program vs. an online savings account after 1 year:

Considering the amount of money that you have invested, these differences may seem minimal. Remember, the Bank Of America Preferred Reward numbers include the reduced mortgage orientation fees and the reduced APR on the auto loan. Both of these items will not be a part of everyone's portfolio, especially the mortgage, which you will hopefully only be signing up for once or twice in your life. 

Now, we will compare the Preferred Rewards Bank of America savings (including the interest rate booster on your money market savings account and the Bank of America Rewards card while removing the mortgage fee savings and the auto loan APR reduction) to that of an online savings account over the course of one year. 

With the mortgage and auto loan APR reduction removed, the online savings account comes out way ahead. There is also the fact that you can deposit your money into an online savings account today and immediately begin to reap the benefits. With the Bank of America Preferred program, you have to wait a minimum of 3 months from the time of your deposit, and then apply for the program. While it is nice to see a bank offering a program like this to its best customers, an online savings account is much easier to establish and has the potential to save you hundreds of dollars more each year.