Everything you should know about Bank of America’s Preferred Rewards program

Editor’s note: This is a recurring post, regularly updated with new information.

It’s wonderful to redeem points and miles for travel arrangements such as lodging and flights. But there can be many other types of expenses involved in planning a trip, too, such as car rentals, train tickets, gas and campsite fees, among others. Luckily, using cash-back rewards in combination with your points and miles can save you even more money on your next vacation.

With that in mind, we’ll be taking a closer look at the often passed-over Bank of America Preferred Rewards program. On top of the simple banking benefits members can expect, consolidating your finances with Bank of America can also boost your cash-back earnings on some of the best Bank of America credit cards.

That’s because Bank of America designed its Preferred Rewards program to incentivize consumers to move all of their checking, savings, investment and retirement accounts to Bank of America and Merrill.

The higher your balance of total assets with the bank, the more perks you can unlock, including with its credit cards. Depending on your holdings and the type of rewards you’re looking to accumulate, it might be time to stop ignoring Bank of America Preferred Rewards.

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Preferred Rewards program basics

To qualify for the Bank of America Preferred Rewards program, you must have both of the following:

• An active, eligible Bank of America checking account.
• A three-month combined average daily balance of $20,000 or more in qualifying Bank of America deposit accounts and/or Merrill investment accounts.

There are now five tiers of Preferred Rewards, which you qualify for based on your combined average daily balance. They are organized like so:

• Gold: $20,000 or more in total assets.
• Platinum: $50,000 or more in total assets.
• Platinum Honors: $100,000 or more in total assets.
• Diamond: $1,000,000 or more in total assets.
• Diamond Honors: $10,000,000 or more in total assets.

How to reach the required balance

While not exorbitant, those are still some pretty high figures to hit. You might have more opportunities to do so than you think, though.

If you have an emergency fund, a holiday account, a savings account and checking account, combining all those balances could easily qualify you for the first tier of Preferred Rewards. Once you add in investment accounts, such as IRAs, you may even find that the Platinum or Platinum Honors tiers are within reach.

Balances don’t have to be started with Merrill or Bank of America to count. Specifically, you can roll existing IRAs and investment accounts over to Merrill or Bank of America and immediately use those balances to begin establishing a three-month average to boost your tier. Of course, you’ll have to consider other things like account management fees and available investment options to decide whether doing so is a good option.

Related: Some Bank of America cardholders now get new perks — and you can use them at home

How to move among Preferred Rewards tiers

You can rise from one rung to the next any month after your average daily balance for the three previous months reaches the threshold for the following tier. Once you reach a specific status level, though, you might not need to keep all your cash in the Bank of America basket. Instead, you’ll maintain your Preferred Rewards tier status for 12 months. If you no longer meet the qualification requirements after 12 months, you have a three-month grace period to do so. If you still don’t meet the criteria after the three-month grace period, you’ll either be moved to a lower tier or completely lose your Preferred Rewards benefits.

That means if you reach the $100,000 average daily balance threshold for three months, Bank of America will upgrade you to Platinum Honors. Then, even if your average daily balance drops below $100,000, you’ll maintain Platinum Honors for a total of 15 months before being downgraded.

Related: Full guide to Bank of America’s BankAmeriDeals cash-back deals

Preferred Rewards program benefits

Bank of America launched the Diamond and Diamond Honors tiers at the end of 2021. Here’s a chart of the five Preferred Rewards tiers and the benefits associated with each level:

Now, let’s take a closer look at each of these benefits.

Savings interest rate booster

You need to have a Bank of America Advantage Savings account and be an enrolled Preferred Rewards member to enjoy this benefit. If you have an existing savings account, it will not automatically convert to a Bank of America Advantage Savings account when you enroll in Preferred Rewards. So, be sure to request the conversion when joining Preferred Rewards.

At Gold, the interest rate boost is 5%, but don’t get too excited. For example, if your interest rate is 1.00%, a 5% rate booster would increase the interest rate to 1.05%. Here’s the current annual percentage yield on a Bank of America Advantage Savings account for a sample Florida resident to give you some perspective:

You can check how this boost would affect the current annual percentage yield on a Bank of America Advantage Savings account in your region here.

Related: 6 questions to ask before choosing a savings account

Credit card rewards bonus

Preferred Rewards members earn a 25%, 50% or 75% rewards bonus on select Bank of America cards. For credit cards that earn points or cash rewards, you will receive a rewards bonus on every purchase. Your earning rate is based on your Preferred Rewards tier when the purchase posts to your account. We’ll get into how this plays out with specific cards below.

You can earn the Preferred Rewards bonus on most Bank of America consumer-branded credit cards, including the Bank of America® Premium Rewards® credit card, the Bank of America® Travel Rewards credit card, the Bank of America® Unlimited Cash Rewards credit card and the Bank of America® Customized Cash Rewards credit card, among others.

However, the following cards are not eligible for the rewards bonus:

• Non-rewards credit cards.
• Business-purpose credit cards.
• BankAmericard Better Balance Rewards®.
• Merrill branded (including MERRILL+®, Merrill Octave® American Express® and Private Banking and Investment Group Octave® American Express®).
• Bank of America® Private Bank Octave®.
• AAA® Gas Rebate.
• Air France KLM World Elite Mastercard®.
• Alaska Airlines, including the Alaska Airlines Visa® credit card.
• Allegiant World Mastercard®.
• Amtrak Guest Rewards.
• Amway.
• Asiana Airlines.
• Celebrity Cruises.
• Royal Caribbean International.
• Sonesta World Mastercard®.
• Spirit Airlines, including the Free Spirit® Travel More World Elite Mastercard® and the Free Spirit® Travel Mastercard®.
• Virgin Atlantic Airways®, including the Virgin Atlantic World Elite Mastercard®.

The information for the Bank Americard Better Balance Rewards, Bank of America Private Bank Octave, AAA Gas Rebate, Air France KLM World Elite Mastercard, Allegiant World Mastercard, Amtrak Guest Rewards, the Free Spirit Travel More World Elite Mastercard and Free Spirit Travel Mastercard and the Virgin Atlantic World Elite Mastercard has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related: Chase Sapphire Preferred vs. Bank of America Travel Rewards — which should beginner travelers get?

Mortgage origination fee reduction

Anytime you can cut down on fees for buying or refinancing a home, you should. Preferred Rewards members are eligible to receive this particular discount beginning three business days after the end of the calendar month in which you satisfy the Preferred Rewards tier qualification requirements.

The origination fee reduction can’t exceed the amount of the lender origination fee. The Preferred Rewards fee reduction isn’t transferable. And you may not be able to combine this fee reduction with other discounts.

Related: 5 things to consider before buying your first house

Auto loan interest rate discount

You must complete an auto purchase finance or refinancing loan through Bank of America to qualify for this rate discount. This benefit is not transferable, so only the Preferred Rewards member can take advantage of this perk.

Of course, you’ll need to make sure that Bank of America offers the most competitive rate after the discount, otherwise it might not be worth pursuing. Even the small difference of just a quarter of a percent could save or cost you thousands of dollars over the life of the loan.

Related: How refinancing your car loan could put some quick cash in your pocket

Home equity interest rate discount

You can get a home equity line of credit interest rate discount beginning three business days after the end of the calendar month in which you satisfy the Preferred Rewards tier qualification requirements. This benefit is non-transferable, but you may be able to combine this perk with other home equity interest rate discounts. And even co-borrowers are eligible.

Your discount will be based on the tier of Preferred Rewards that you have at the time of application, and is not subject to adjustment. So if you are Gold when you apply, but achieve Platinum later on, you won’t enjoy any further discount, unfortunately.

Related: 7 ways to improve your finances in 1 week

No-fee banking services

All Preferred Rewards members receive the following banking services:

• Monthly maintenance fees waived on up to four eligible checking and four savings accounts from Bank of America.
• No fees for ATM or debit card replacement, including rush replacement, standard check orders, cashier’s checks, check image service, check copies, stop payments and incoming domestic wire transfers.
• Overdraft protection transfer fees waived from your linked savings accounts, secondary checking accounts or from a Home Equity Line of Credit.

Additionally, Platinum, Platinum Honors, Diamond and Diamond Honors members have no fees for incoming international wire transfers and can open a small safe deposit box for free at a Bank of America branch.

Free non-Bank of America ATM transactions

In the U.S. and U.S. territories, Platinum and Platinum Honors members:

• Won’t be charged non-Bank of America ATM fees.
• Will receive a refund of the ATM operator or network fee for withdrawals, balance inquiries and balance transfers.

Platinum members receive one free transaction per statement cycle (so up to 12 annually), and Platinum Honors members have no cap.

Meanwhile, Diamond and Diamond Honors members have unlimited no-fee transactions both in the U.S. and internationally.

Related: 7 ways to save on overseas ATM withdrawals

Merrill Guided Investing fee discount

Preferred Rewards members enjoy a fee discount when utilizing Merrill Guided Investing services. You can get started with as little as $1,000 for Merrill Guided Investing or $20,000 for Merrill Guided Investing with an advisor.

Merrill Guided Investing typically charges a fee of 0.45% of assets under management, and Merrill Guided Investing with an advisor typically charges a fee of 0.85% of assets under management. While those fees might seem small, they add up over time. As such, these charges can turn into a compound drain on your investments as they increase. So, it may be best to look for a financial advisor that charges a fixed fee instead of a percentage of your assets.

Related: Tips on how to become financially independent

Foreign currency exchange rate discount

Bank of America Diamond and Diamond Honors members can order foreign currency through online banking or the mobile banking app and effectively get a 2% exchange rate discount. You'll also get free standard shipping.

Access to exclusive lifestyle benefits

Top-tier Diamond and Diamond Honors members will enjoy customized and unique lifestyle experiences, whether it's travel, wellness, events, food and drink or other personal services. You can get a preview of some of these curated offers here.

Personalized concierge service

Finally, Diamond and Diamond Honors members will have complimentary access to "third party experts who can help navigate complex topics, such as college advice, career support, and eldercare options."

How to maximize cash-back earning with Bank of America credit cards and Preferred Rewards

To maximize the Bank of America Preferred Rewards program, you’ll want to qualify for at least Platinum Honors and be eligible for the 75% bonus on your credit card rewards. Of course, it’s not a great idea to make big investment and banking decisions based entirely on credit card bonuses. However, it may be worthwhile if you already plan to invest in Merrill and have an existing banking relationship with Bank of America. If you do, here are some of the bank’s rewards cards to consider, and how you can maximize your cash-back earning with them.

Bank of America Premium Rewards credit card

The Bank of America Premium Rewards credit card is an excellent fixed-value card in its own right. But it gets even more competitive when you add in the bonuses from the Preferred Rewards program.

The card charges a $95 annual fee and offers a modest selection of benefits. For example, cardholders get an up-to-$100 annual airline incidental fee statement credit, a Global Entry or TSA PreCheck application fee credit every four years (up to $100) and some decent travel protections.

However, this card shines with its earning rates on everyday spending as well as travel and dining purchases. Here’s how the earning rates stack up once you consider the Preferred Rewards credit card rewards bonus:

You can redeem points from the Bank of America Premium Rewards card at a rate of 1 cent apiece for gift cards and purchases through the Bank of America Travel Center, as a statement credit to your credit card, and as cash deposits into Bank of America checking and savings accounts or eligible Merrill Edge and Merrill Lynch accounts. So you can get a return of at least 2.625% on all purchases with this card if you hold Preferred Rewards Platinum Honors status. This great return makes the Bank of America Premium Rewards credit card one of the best credit cards for everyday spending.

Related: Not to be underestimated: Bank of America Premium Rewards credit card review

Bank of America Travel Rewards credit card

If you want to avoid paying an annual fee, you could opt for the Bank of America Travel Rewards credit card instead. The Travel Rewards card earns 1.5 points per dollar on all purchases. Points can be redeemed to cover travel purchases at a rate of 1 cent per point. You can also redeem points for gift cards or cash, but you’ll get a lower value for these options.

By earning 1.5 points per dollar on everything plus a 75% Preferred Rewards bonus as a Platinum Honors (or higher) Preferred Rewards member, you effectively earn 2.625% cash back toward travel purchases made with the card. That’s a fantastic cash-back rate to earn on all spending — especially for a card with no annual fee.

Related: Bank of America Travel Rewards card: Simplicity for points beginners

Bank of America Unlimited Cash Rewards credit card

The Bank of America Unlimited Cash Rewards credit card is great for folks who don’t want to keep track of multiple bonus categories, but who still want to earn at a strong fixed rate on all their purchases. Cardholders earn unlimited 1.5% cash-back rewards on all purchases with no limit.

Platinum Honors and higher members would actually get back 2.625% on all your purchases — one of the best rewards rates any card offers for non-bonus everyday purchases.

Related: The best Bank of America cards of 2022

Bank of America Customized Cash Rewards credit card

Another no-annual-fee card to look at is the Bank of America® Customized Cash Rewards credit card. It earns 3% in one of the following categories of your choice each calendar month:

• Gas.
• Online shopping.
• Dining.
• Travel.
• Drugstores.
• Home improvement/furnishings.

It also earns 2% back at grocery stores and wholesale clubs and 1% back on everything else. Just note that you can only earn 3% and 2% on up to $2,500 in combined purchases each quarter.

So, if you're at least a Platinum Honors member, you’ll earn up to 5.25% cash back on your 3% category, up to 3.5% cash back at grocery stores and wholesale clubs and 1.75% cash back on all other purchases. That’s pretty phenomenal for a no-annual-fee cash-back rewards card.

Related: Customize your rewards structure: Bank of America Customized Cash Rewards credit card review

Bottom line

The Bank of America Preferred Rewards program is probably not worth pursuing unless you can qualify for at least Platinum Honors to maximize the 75% bonus on credit card earnings. That said, the program’s perks mean that if you already do business with Bank of America or Merrill, you should consider consolidating your banking and investing to boost your rewards and benefits.

It might even be worth switching to Bank of America if doing so won’t cost you anything extra. After all, the Preferred Rewards program can tip the scale on some of Bank of America’s top card offerings and reward you with significant discounts on other banking services like mortgage and auto loans.

For additional reading, check out our round-up of the best rewards credit cards.

Additional reporting by Stella Shon.

Updated 1/18/23