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2.50% 9-Month Risk Free CD at Bank of America in Many States


Update 3/21/09: The 0.25% bonus rate is no longer available. Also, the rate has fallen. Please check Bank of America's website for the latest rates.

Bank of America is offering a 9-month Risk Free CD with a promotional rate of up to 2.50% APY in several states. This rate includes a 0.25% rate bonus for opening the CD with $10,000 of new money. Without this, the rate is 2.25% APY. Maximum deposit is $1 million.

These rates are listed at Bank of America's Risk Free CD Page as of 3/04/09. Not all states have these rates. I've checked California, Florida, New York and Illinois at Bank of America's website, and all have the 2.50%/2.25% rates. However, Texas has lower rates (2.00%/1.75%). If you live in another state, please leave a comment about what's listed for your state.

The details of the Risk Free features are described in the small print:
We waive the early withdrawal penalty after the first 6 days of the account term (or the first 6 days following any partial withdrawal), when you reinvest the amount withdrawn in any Bank of America deposit account. We may require at least 7 days' prior written notice of your intended withdrawal.

It's important to note that penalty-free withdrawals are allowed only when those funds are transfered into an existing Bank of America account.

The CD can be opened online and funded with money from an existing Bank of America checking or savings account. It can also be funded with an ACH transfer from another checking or savings account at another financial institution. I was told via the online chat that this CD could also be opened at a branch.

According to the CSR, these promotional CD rates are subject to change daily. The rate locks at the time of the application. It's a fixed-rate CD, so once it's opened, the rate won't change until maturity. Finally, I was told they only do a soft credit inquiry, and not a hard pull. So there should be no impact to your credit score. Note, CSRs are often wrong on this.

Other Bank of America Promotions

Update 3/14/09: Bank of America is offering a 2.50% APY 12-month online CD with a $10K minimum deposit of new money. Offer is listed at this Bank of America promotional page. Note, the rate varies by state.

Bank of America has been advertising other promotions. On Monday a reader noted that BofA ads in the Chicago Tribune advertising a 2.75% APY 12-month CD. Minimum deposit is $10K, and it required a checking account or Premier or Private Bank relationship. According to the small print, it's available in FL, IL, MI, IN, MA and NH.

Bank of America has also been advertising promotional money market accounts. A reader mentioned seeing an ad in the LA Times for a 2.30% APY money market savings account with the rate guaranteed through 6/30/09. Minimum deposit is $10K, and it requires a Prima or Premier Checking Account relationship. This is similar to a promotion advertised in Dallas last week. For the Dallas promotion, the rate was 2.50% APY. I would think there are likely to be similar promotions in other states outside of Texas and California.

How It Compares to the Competition

Every now and then, BofA offers a decent rate on its CDs. Last year they were offering a 4.11% 7-month Online CD. The 2.50% APY may not sound that great, but unfortunately, in this current rate environment, it's very competitive. As a comparison, ING Direct's 9-month CD rate is only 1.25% APY. You can get a little better at some online banks, but not much. GMAC Bank is offering 2.65% APY. Factor in the Risk Free feature, and the Bank of America CD is a very good deal. Refer to my weekly rate summary for other rates.

Latest Bank of America News

Bloomberg reported that Bank of America's credit rating has been downgraded by Standard & Poor's to A from A+. Its acquisitions of Merrill Lynch and Countrywide have put stress on the company. BofA reported its first loss in 17 years in the fourth quarter. They've received $25 billion in TARP funds.

I wouldn't want to be a stock shareholder of BofA, but I doubt depositors have anything to worry about except for fees and bad customer service. As always, it's best to stay under the FDIC insurance limits.

Thanks to the readers who mentioned this Risk Free CD and the other BofA promotions in the Daily News & Deals Post.

Related Pages: CD rates, Bank of America

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Anonymous   |     |   Comment #1
Arizona 2.00%/1.75%
Dealster81 (anonymous)   |     |   Comment #2
I think it is a decent deal, submitted it to BankFiesta.com to share with others. Thanks!
Anonymous   |     |   Comment #3
MA has the higher rates.
Anonymous   |     |   Comment #4
You can open the CD in any state even though you do not live in that state. For e.g. you can live in Texas and open a CD in California because these are online CD's.
It was confirmed by the Bank of America representative.
Anonymous   |     |   Comment #5
Virginia - 1.75% APY
Anonymous   |     |   Comment #6
"You can open the CD in any state even though you do not live in that state. For e.g. you can live in Texas and open a CD in California because these are online CD's.
It was confirmed by the Bank of America representative."

I don't bother with BofA and similar megabanks. Customers get mediocre rates plus excessive complications for "promos," while bank execs get big bonuses at taxpayers' expense.

In this instance, why not just have a single online rate that is state neutral? They seem to want a piece of the fast-growing online action but don't know how to replicate the required ease and simplicity.

No thanks, I'll just stick with credit unions and community banks.
Anonymous   |     |   Comment #7
I'll go with any bank or credit union that is FDIC or NCUA insured offering the highest rates available who's membership is open to me.
That's why I love this site so much.
Anonymous   |     |   Comment #8
I opened the account with more than 10K but I did not get the 0.25% bonus APY as promised. I had to call them to adjust the APY.

Make sure you guys check the APY once the account is opened.
Anonymous   |     |   Comment #9
I noticed that the rates at the banks are higher than online
sassafrasgreenbuilding (anonymous)   |     |   Comment #10
Bank of America is also charging random fees and nobody in customer service can help you get them waived!
Frugal Frugalson
Frugal Frugalson (anonymous)   |     |   Comment #11
I was at a BOA branch in MA today and the 2.5% rate was available for the 9 month risk free CD with a $5k minimum and no new money requirement.
Anonymous   |     |   Comment #12
A BofA customer rep told me today $5k minimum in California. This was over the phone.
Anonymous   |     |   Comment #13
bank of America sucks. I was a Countrywide Bank customer. I opened a e-link account with countrywide with no min balance etc. But after BAC bought them, they began charging me $10 per month

Closing an account in BAC is also troublesome. You need to call a 800 number many times and waiting forever and get transfered to other departments many times in between. Finally they might tell you to go to a local bank to take out your money then call the 800 number again.

Finally you call the 800 number again, then they will ask you why you want to close your account and repeat the same ***** again and again..wasting you time...Stay away from them...beware!!!

BAC is a robber!