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All You Need to Know about Bank of America Preferred Rewards Program

Bank of America

Incentives are a useful method for a wide range of businesses to serve two purposes. First, incentives can convince potential customers to become paying customers by making the prospect of a business relationship that much more appealing to them. Second, incentives can help businesses hold onto its existing customers by building up their sense of loyalty. Combined, these two factors are critical because they enable businesses to gain more out of their relationship with each customer than otherwise possible, thus raising revenues while lowering costs in the same process. As a result, it should come as no surprise to learn that Bank of America has a Preferred Rewards Program, which exists for the purpose of making its financial products and services as well as Merrill Edge and Merrill Lynch's financial products and services seem that more more appealing. With that said, it is important to note that this rewards program is same as others in that while it has clear benefits, it can have not so clear costs as well, which is why interested individuals will want to know as much about them as possible before becoming involved in it.

What Should You Know About Bank of America's Preferred Rewards Program?

First, interested individuals might want to know the requirements for becoming a member in Bank of America's Preferred Rewards Program. In short, when someone has $20,000 in assets split between various accounts with Bank of America, Merril Edge, and Merril Lynch, they are entitled to Gold-tier benefits. Likewise, if they have $50,000 and $100,000 in assets, they are entitled to Platinum-tier and Platinum Honors-tier benefits. With that said, while this can seem simple and straightforward in nature, it should be remembered that meeting these requirements have opportunity costs. After all, if people choose to concentrate their assets with Bank of America, Merril Edge, and Merril Lynch, that means that they won't be able to put those assets in other accounts with other financial institutions. As a result, there is a genuine choice that needs to be made, which is something that interested individuals should remember.

Interestingly, moving up and down the tiers is done on an automatic basis, but there are different rules for how that happens. In short, people can move up so long as their average daily balance for the past 3 months has reached the necessary threshold. In contrast, they can't move down unless an annual review of their situation determines that they should be moved down, which can come as welcome news to some.

With that said, the benefits of Bank of America's Preferred Rewards Program are rather wide-ranging in nature. For example, one benefit is a boost in the money market savings interest rate, which rises to 5 percent for Gold tier, 10 percent for Platinum tier, and 20 percent for Platinum Honors tier. Meanwhile, another benefit is a reduction in the mortgage origination fee, which sees a reduction of $200, $400, and $600 for the respective tiers. Even something like an auto loan gets interest rate reductions of 0.25 percent, 0.35 percent, and 0.5 percent, so it should come as no surprise to learn that Bank of America's Preferred Rewards Program extends to other financial products and services such as its credit cards, banking transactions, and even investment transactions. In particular, it should be mentioned that any one of the three tiers comes with no banking fees, which makes sense because if someone is doing that much business with Bank of America and the other two, they are making more than enough profit for them to waive the fees for the purpose of making such customers as happy as possible.

On the whole, it is clear that Bank of America's Preferred Rewards Program is intended to convince interested individuals to make use of more and more of their financial products and services. Moreover, it wants interested individuals to make use of a wider range of those financial products and services, which is why there are benefits for such a wide range of things. As a result, if someone wants to get the best results from this particular program, they had best be prepared to go all-in on Bank of America, Merril Edge, and Merril Lynch. This is not necessarily a bad thing, but it does mean that their options might be constrained somewhat because the benefits of Bank of America's Preferred Rewards Program will always be something that they have to weigh.

Garrett Parker

Written by Garrett Parker

Garrett by trade is a personal finance freelance writer and journalist. With over 10 years experience he's covered businesses, CEOs, and investments. However he does like to take on other topics involving some of his personal interests like automobiles, future technologies, and anything else that could change the world.

Read more posts by Garrett Parker

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