Wednesday, 1 May 2024
Chase and Bank of America are two of what some call the “Big Four” banks in the U.S., along with Wells Fargo and Citigroup. Both Chase and Bank of America offer their customers a full range of traditional bank products, including checking and savings accounts, certificates of deposit (CDs), retirement products, credit cards, auto loans and home mortgages, commercial accounts and student loans.
Through subsidiaries, each bank also offers brokerage services.In this review, we’ll look at how Chase and Bank of America compare on the things that really matter to consumers: interest rates on deposit accounts, the types of accounts offered, and the fees and fine print. Is either a good place for your money? Depending on the products you are looking for, probably not unless you take advantage of one of the special CD rates. Otherwise, online banks may offer higher rates and better terms.
Both Chase and Bank of America have been around for more than a century. Chase Bank goes back to 1799, when Aaron Burr (the Aaron Burr), founded the Bank of the Manhattan Company. After a 1955 merger, the bank was known for many years as Chase Manhattan until it merged with J.P. Morgan & Co. in 2000 and became Chase Bank. Today, Chase is a national bank headquartered in New York City with 4,983 branches in 23 states.
The oldest parts of Bank of America date back more than 240 years. The bank grew over the years and is known, among other things, for issuing the first bank credit card, BankAmeriCard, in 1958. The bank we today know as Bank of America was created in 1998 after a merger of BankAmerica with NationsBank. Headquartered in Charlotte, N.C., Bank of America has 4,340 branches in 34 states.
A good way to compare two banks is to look at the interest rates they pay on checking accounts, savings accounts and CDs. Then compare those rates to those available elsewhere to see if you should consider another alternative.
| Chase | Bank of America | National bank average* | Online bank average* | |
|---|---|---|---|---|
| Savings | 0.01% to 0.40% APY depending on account type and balance | 0.03% to 0.06% APY depending on account balance and type | 0.27% APY | 1.52% APY |
| Checking | 0.01% APY | 0.01% to 0.02% APY only for Relationship Checking, depending on account balance. | 0.19% APY | 0.41% APY |
| 1 year CD | 0.02% to 0.05% APY depending on amount deposited | 0.05% APY for 12 months; 13-month CD pays 2.00% APY |
1.36% APY | 2.09% APY |
| 5 year CD | 1.40% to 1.55% APY depending on amount deposited | 0.75% APY | 2.26% APY | 2.70% APY |
The rates that Chase and Bank of America offer on checking and savings accounts are essentially similar. One difference is that at Bank of America, only the third tier checking account pays interest. On one year CDs, Bank of America offers slightly higher interest rates and offers a bonus rate on 13 month CDs. On five year CDs, Chase comes out slightly ahead. But in an era of low rates, small differences can carry the day.
The bottom line: Choose the bank with the highest rate for the product you want. There is nothing wrong with having deposits at more than one bank.
Chase offers a regular checking account plus the Premier and Sapphire accounts. The latter options provide access to more of the services that Chase offers, such as free cashiers checks and money orders for Premier clients (also offered to Sapphire clients) and no fees on incoming and outgoing wire transfers or insufficient funds for those with Sapphire accounts. The checking account levels at Chase require different minimum balances or use of services to avoid monthly fees.
Similarly, Bank of America also offers three levels of checking accounts, Advantage SafeBalance, Advantage Plus and Advantage Relationship, each with a different monthly fee. Only the Advantage Relationship checking account pays interest. The free or discounted services each level offers depend on enrollment in the bank’s Preferred Rewards program. That program offers different levels of rewards for things like monthly fees, discounts on mortgage origination fees and auto loan interest rate.
For example, if you had Gold status in the rewards program, which requires a balance above $20,000, you would get a $200 discount on mortgage origination fees and a 0.50% discount on auto loan interest. All checking accounts offer one free non-Bank of America ATM withdrawal for each statement cycle.
In comparison, Chase has higher regular interest rates on certain CD and savings products and lower rates on others. Discounted checking services at Bank of America depend on how much you earn in the rewards program.
Which account is better depends on the services you plan to use most. Certain services at one bank may be less expensive and others may cost more. Make your choice based on the services most important to you.
| Chase | Bank of America | |
|---|---|---|
| Standard savings account | $5 monthly fee unless the balance at the beginning of each day is $300 or more or there is a least on repeating automatic transfer of $25 or more from your personal Chase checking account or the account owner is under age 18 or the account is linked to a Chase Premier or Sapphire checking account or Chase Private Client checking | $8 monthly fee unless you maintain a minimum balance of $500, link the account to a Relationship checking account or enroll in Preferred Rewards and achieve Gold, Platinum or Platinum Plus status. |
| Standard checking account | Monthly service fee of $12. Fee waived if account has $500 or more in direct deposits or $1,500 balance at the beginning of each day or an average beginning of day balance of $5,000 or more or is linked to qualifying Chase checking, savings or other balances. | $4.95 monthly fee. Fee waived if you are either a student under age 24 or are enrolled in the bank’s Preferred Rewards program which can also earn you discounts on other services based on account balance in Bank of America and Merrill Lynch accounts. Higher fees for other checking levels. |
| ATM fee | No charge for Chase ATM; $2.50 per use for non-Chase ATM in U.S. Fees waived for certain checking accounts. | No charge for Bank of America ATM; $2.50 per use for non-bank ATMs in U.S. Fees waived under certain circumstances. |
| Overdraft fee | $34 per item for insufficient funds or returned items to a maximum of three fees per day. | $35 overdraft fee for each item the bank authorizes over $1. No more than four overdraft or returned item fees charged each day. |
The fees charged by Chase and Bank of America are essentially similar. The Bank of America fee on savings accounts is slightly higher and requires a somewhat higher minimum balance to avoid it. ATM fees are the same and have similar rules for avoiding them.
The overdraft fees both banks charge are also essentially the same, however Bank of America charges a maximum of four fees per day while Chase only charges three. At $35 each time, that can be potentially costly if you are prone to account overdrafts.
Check out our roundup of the best free checking accounts here.
As with any brick and mortar bank, many consumers who decide to do business with Chase do so because it is convenient. Maybe there is a Chase branch is located near where you live or a branch is located in your office building. The basic banking services that Chase offers, including, checking and savings, as well as credit cards, loan services and commercial banking products are similar to those their competitors offer. Interest rates on those products that pay interest are similar to competitors, particularly Bank of America. Why should you bank with Chase? Because convenience is the most important factor to you.
Convenience is also a factor in deciding to do business with Bank of America. With branches in 34 states, there may be one near you. With deposit services more or less the same as Chase, and interest rates similar as well, use Bank of America based on some of the other services they offer. Perhaps you have an account at Merrill Lynch — or want to open one — and you can combine balances to get more banking services — overdrafts, loan discounts, no ATM fees — that will make the Bank of America experience less costly. Or perhaps you want a Bank of America home loan. With large banks, what you get is more about the total services the institution provides.
If you aren’t sure a large bank is the best option for you, there are alternatives. In recent years, online banks have become more common and offer low fees and interest rates that are frequently higher than those offered by big banks. If you aren’t committed to being able to visit a branch and are willing to conduct your business online, you may want to check out our list of the best online banks.
What should you look for? While this depends on the products and services you need based on your situation, in addition to low fees and high interest rates, look for banks that offer the kind of services you want. This includes an 800 number to resolve account problems, the ability to make deposits easily using your phone and a robust website to find out about account services and resolve account questions. What doesn’t matter? Where the bank is located because all of your business is done online.
*National and Online bank averages and any fees mentioned in this article were compiled and are accurate as of the date of publishing.
* Sponsors listed are Member FDIC or NCUA insured.
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Source: https://www.magnifymoney.com/blog/reviews/chase-vs-bank-of-america/
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