Bank of America Preferred Rewards: Boost Your Card Earnings With Your Savings

Everyone needs to keep their money somewhere. Banks have all sorts of programs and incentives to try to earn your business. Most people have a checking and savings account, and maybe some investment or retirement accounts. The more accounts you have, also factoring in mortgage and car loans, the more valuable a customer you could be for a bank. Banks want all of that action for themselves, so why shouldn't they reward you for giving them your business? This is where the Bank of America Preferred Rewards program comes into play. One simple visit or call with a Bank of America banker can unlock massive earning potential — even multiplying the earning rates on your credit cards.

You can take your existing funds and put them to work for you, potentially gaining new customer bonuses and multiplying your earnings on Bank of America credit cards after moving your assets. Bonuses will depend on the value of assets you transfer to Bank of America. If you aren't already earning extra on your money elsewhere, then perhaps the Bank of America Preferred Rewards program is for you. Let's take a look at the program details to see if it's right for you.

The Bank of America Preferred Rewards Program

The Bank of America Preferred Rewards program rewards customers with various bonuses and discounts based on the amount of money they keep in eligible Bank of America or Merrill accounts. You can deposit funds or transfer stocks and other brokerage assets to fund your accounts. Quite often, there will be bonuses you can earn when you open these new accounts. Bank of America gives customers a tangible cash-back reward incentive to earn their banking business. This can include earning up to 75% extra on every purchase with your credit card.

Credit: Scott Graham/Unsplash

To qualify for the Preferred Rewards program, you must have a minimum balance of $20,000 across your eligible Bank of America and Merrill accounts.

Eligible account types

The following types of accounts qualify:

• Bank of America checking, Advantage Banking, savings, money market savings, CDs, and IRAs
• Merrill investment accounts, including IRAs and Cash Management Accounts
• Merrill 529 college savings accounts
• Revocable grantor trust accounts

Once you have the needed assets, you can enroll online for free. Many of Bank of America's credit cards are a part of the program and are eligible for tier-based bonuses, as well, and you can have multiple different cards that qualify for the bonuses. Credit cards that do not earn rewards aren't eligible, and nearly all co-branded credit cards are excluded as well.

Unfortunately, business credit cards are not eligible for the personal Preferred Rewards program, although Bank of America has a Business Preferred Rewards program with an almost identical rewards system for business customers holding assets in a similar fashion in business accounts with Bank of America and Merrill. The other types of accounts that do not qualify are:

• Employee benefit plans, including 401(k) accounts, and annuities managed by Bank of America or Merrill
• Irrevocable trust accounts
• Uniform Transfers to Minors Acts and Uniform Gifts to Minors Act accounts

Qualification considerations

While the needed amounts might seem high, it can actually simplify your banking. You may want to consider consolidating all your assets from various banks and brokerages into Bank of America and Merrill. There will almost certainly be bonuses available for your efforts.

Merrill is an easy-to-use brokerage site, offering commission-free online stock, ETF, and options trades. If you have an individual retirement account, whether it is a Roth IRA or traditional IRA, transferring those assets to Merrill is a quick and easy path toward earning Preferred Rewards status. The bankers can easily move your assets over from other accounts, so all you need are the account numbers and some paperwork. It is easy to switch between the Bank of America and Merrill Lynch websites, as they are linked together.

Bank of America Preferred Rewards Tiers

The Bank of America Preferred Rewards program has four tiers: Gold, Platinum, Platinum Honors, and Diamond. There is a fifth, private banking tier called Diamond Honors.

Your tier is determined by your three-month combined average daily balance. This total consists of your balance with all eligible checking, savings, and investment accounts. It is worth noting that you will not automatically be put into a tier right upon depositing funds in new accounts. You can usually have your banker speed this process along so that it doesn't take a full three months to be placed into your tier. Also, your tier can change if your balances dip below the threshold needed to maintain your current tier. You will be permitted to keep the higher tier level for one year. After a three-month grace period, you will then be placed into the lower tier, based on your current balances.

Discounts and better rates

As you go into each higher tier, you get better rates, boosters, and discounts. This includes boosted rates on savings accounts, discounted rates on home equity lines of credit, auto loan applications, foreign currency exchanges, and Merrill Guided Investing, as well as reduced origination fees on new purchase or refinance mortgages, and waived banking fees.

All Bank of America Preferred Rewards tiers come with priority member service, no monthly maintenance fees on up to four eligible checking and four savings accounts from Bank of America, and no fees on select services — such as standard check orders, cashier’s checks, incoming domestic wire transfers, and more — and even reduced origination fees on new purchase or refinance mortgages.

Gold tier

You qualify for the Gold tier with a three-month combined average daily balance between $20,000 and $49,999. Benefits at the Gold tier include:

• 25% rewards bonus on eligible credit cards
• $200 reduction on the origination fee of a new Bank of America purchase or refinance mortgage
• 5% interest rate booster on a Bank of America Advantage Savings account
• 0.125% interest rate discount on a new Bank of America home equity line of credit
• 0.25% interest rate discount on a new Bank of America auto purchase or refinance loan
• 1% discount for mobile and online orders of foreign currency, plus free standard shipping
• 0.05% annual program fee discount on Merrill guided investing products 
• No monthly maintenance fees on up to four eligible checking accounts and up to four eligible savings accounts
• Waived fees on multiple banking services

Platinum tier

You qualify for the Platinum tier with a three-month combined average daily balance between $50,000 and $99,999, offering the following perks above those at the Gold level:

• 50% rewards bonus on eligible credit cards
• $400 reduction on the origination fee of a new Bank of America purchase or refinance mortgage
• 10% interest rate booster on a Bank of America Advantage Savings account
• 0.25% interest rate discount on a new Bank of America home equity line of credit
• 0.35% interest rate discount on a new Bank of America auto purchase or refinance loan
• 1.5% discount for mobile and online orders of foreign currency, plus free standard shipping
• 0.1% annual program fee discount on Merrill guided investing products
• Includes up to 12 no-fee non-Bank of America ATM transactions in the U.S. per year

Platinum Honors tier

You qualify for the Platinum Honors tier with a three-month combined average daily balance between $100,000 and $999,999, providing the following benefits above those at the Platinum tier:

• 75% rewards bonus on eligible credit cards
• $600 reduction on the origination fee of a new Bank of America purchase or refinance mortgage
• 20% interest rate booster on a Bank of America Advantage Savings account
• 0.375% interest rate discount on a new Bank of America home equity line of credit
• 0.5% interest rate discount on a new Bank of America auto purchase or refinance loan
• 2% discount for mobile and online orders of foreign currency, plus free standard shipping
• 0.15% annual program fee discount on Merrill guided investing products
• Unlimited no-fee ATM transactions within the U.S.

Diamond tier

You qualify for the Diamond tier with a three-month combined average daily balance between $1 million and $9,999,999, offering the following benefits above those at the Platinum Honors tier:

• 0.25% mortgage interest rate reduction on a new Bank of America purchase or refinance mortgage
• 0.625% interest rate discount on a new Bank of America home equity line of credit
• Unlimited no-fee ATM transactions worldwide
• Access to unique experiences and premium lifestyle benefit offers
• No monthly maintenance fees on all of your eligible checking and savings accounts

Diamond Honors tier

There is a private banking tier called Diamond Honors. You qualify for this tier with a three-month combined average daily balance of $1o million or more. Above the benefits at the Diamond tier, you'll also receive:

• 0.375% mortgage interest rate reduction on a new Bank of America purchase or refinance mortgage
• 0.75% interest rate discount on a new Bank of America home equity line of credit

Credit: Clay Banks/Unsplash

The Sweet Spot: Bank of America Platinum Honors

Among the Preferred Rewards benefits, the most useful is likely the bonus multiplier on eligible Bank of America credit cards. This can raise your cash-back earnings on all purchases.

As you can see from the multipliers for each tier, the best earnings come after reaching the Platinum Honors tier. You get the highest multiplier on your credit card rewards at 75%. With a card like the Bank of America^® Unlimited Cash Rewards credit card, your ongoing earning rate after the first year would be a whopping 2.625% cash back on every purchase, with no cap on extra earnings. The card's annual fee? $0. For no annual fee, that is as good as it gets for return on spending — even rivaling the earning power on cards with high annual fees.

The bonus also applies to other no-annul-fee cards from Bank of America, like the Bank of America^® Travel Rewards credit card. When you factor in the Platinum Honors multiplier, this card goes from earning 1.5 points per dollar to 2.62 points per dollar, turning it into a powerhouse rewards card.

For those who spend heavily on travel or dining out, having the Platinum Honors tier along with the Bank of America^® Premium Rewards^® credit card will enable you to earn 2.625 points on all purchases and 3.5 points per $1 spent on travel and dining.

Another great sweet spot is with the Bank of America^® Customized Cash Rewards credit card. This card offers up to 6% cash back on $2,500 of spending in a category of your choosing each quarter for the first 12 months (then 3%), with a very generous selection. With the Platinum Honors tier status, category earnings in this category jump from 6% to 10.5%. This is an excellent return for a no-annual-fee card.

Maximize Your Credit Card Earnings With Bank of America Preferred Rewards

There are numerous ways to maximize your cash-back returns with Bank of America credit cards and the Preferred Rewards program. If you are able to deposit $100,000 or more in funds and assets with Bank of America and Merrill, you can give all of your Bank of America credit cards supercharged earning rates on all purchases. Earning 75% more on each purchase can provide significant earnings over the course of a year. There is no cap on the amount of cash back you can earn at these accelerated rates.

Utilizing these higher cash-back rates is also a very simple and easy way to keep track of your rewards. While you can do slightly better in some instances with various flight, hotel, and rewards programs, this can be confusing and time-consuming for some. Maximizing your redemptions takes time and skill, whereas the simplicity of cashback is as easy as it gets.

Bottom Line

Since you have to keep your money somewhere (unless you prefer the old shoebox under the mattress method), keeping it with Bank of America and Merrill to unlock top earning rates on credit cards can make sense for those who qualify. The benefits are tangible, providing reduced fees and interest rates, as well as extra earnings when using your credit card. Not everyone will qualify for the program, to be clear, and the top tiers will be out of reach for many people. For those who qualify for Bank of America Preferred Rewards, it could be worth the paperwork to move your assets when you consider the available benefits.

AwardWallet Tip of The Day

Did you know that if someone else accesses your AwardWallet account, you will see an alert at the bottom of the page? Clicking that alert will show you all the current sessions accessing your account. If you see something that doesn’t make sense, you can log the other sessions out and change your AwardWallet password. We highly recommend enabling two-factor authentication on your account for increased security.
Show me how

Hide image