Bank of America Preferred Rewards

Bank of America Preferred Rewards
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There was an excellent thread on FWF about the BofA Preferred Rewards Program originally started by Derek Zoolander. This thread should be a continuation of that discussion. The text version of the thread is archived here:

Bank of America Preferred Rewards Information.

Below is information pasted from the quick summary:

Assets that count are anything that shows up in the single login page when you open up bankofamerica.com, including assets held in a Merrill Edge account. Merrill Edge offers a bonus for moving money there, in addition to letting you hold Vanguard funds and ETFs.

The “MM interest boost” is a % increase on the APR. So if the APR is .01%, a 20% boost is only to .012%. The boost is phrased as it will be “at least” the boost amount. The current rates are significantly higher than the boosted ones, although still pathetically low compared to an Internet-only bank.

“You qualify for benefits in the Preferred Rewards program if you enroll in the program, have an active Bank of America personal checking account and maintain a three month average combined balance in your qualifying Bank of America deposit accounts and/or your qualifying Merrill Edge and Merrill Lynch investment accounts of at least $20,000 for the Gold tier, $50,000 for the Platinum tier, or $100,000 for the Platinum Honors tier. For details on Employee qualification requirements, please visit the Employee Banking & Investments website. . . . … Merrill Lynch Wealth Management clients with greater than $250,000 in assets with Bank of America and Merrill Lynch are eligible for additional banking benefits. Please speak with your Merrill Lynch Financial Advisor for details.” http://www.merrilledge.com/pricing

If one decides to join the program and are bringing money in to qualify, the optimal strategy is to get the Cash Rewards card early, but not to redeem the points earned until you qualify for the bonus rates. Thus, you can start benefiting from the high rates of return (as high as 5.25% on gasoline) earlier while waiting for your three month average to reach the qualifying levels.

The Travel Rewards card combined with the highest tier provides the highest unbonused spend of any generally-available card, and has no AF and no FTF to boot. If you have the Platinum Honors tier, the TR card becomes a 2.625% card on every purchase.

The AAA cobranded card only provides the bonus on the base spending of 1 ppd, but it still does get you to 3.75/2.75/1.75, with the 3.75 on travel, making that a lucrative choice if you are OK with the risk that redemption value for AAA points may change.

They are advertising $100 bonus on the Cash Rewards card after you spend $500. However, if you qualify for the preferred status, the bonus percentage is applied to this amount. If you get Platinum Honors status, the actual bonus is $175 for spending the first $500.

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there is a Preferred Deposit Money market fund a Merrill that I recently began using. it pays about .87%. symbol MLPDA

Is there a way to have cash default to that fund?

Another option is to buy T-Bills, which currently yield about 1%.

Good point. I recently dropped slightly below the 100k mark from buying a house. I have offers on my Barclay card for 0% BT for 14 months for a 1% fee. So if I can find something to make back that 1% with (nearly) guaranteed principal preservation I can bump myself back over the 100k mark without cost.

I had also been thinking about just using some municipal bond funds. However, even with some slight volatility it can wipe out gains in short term

Any other options to park money in Merrill Edge solely for the asset counting that will earn me more nearly risk free?

Do you have any IRA’s? If so, simply roll them over to ME and collect a sign up bonus. With a few exceptions, you’ll be able to hold the exact same securities in your ME brokerage than you hold elsewhere, so there’s no downside to doing this.

Good point. Yes I’ve already done this for both my own and DW’s Roth accounts. I collected the bonuses plus ME paid (reimbursed) the outgoing account transfer fees from my old brokerage of $75 each.

How’d you buy this? Can’t find the ticker in Merrill Edge.

johnm4, once you are in the Platinum Honors status you get to stay in for I think one year (you can verify this). I closed my Merrill account back in March and still have PH status. Not sure what your timeline is.

You have to call in the buys and sells. MLPDA ticker symbol not recognized otherwise.

You have to call in the buys and sells. MLPDA ticker symbol not recognized otherwise

Fell below in April 2016. Lost PH status on wife’s accounts in Feb. 2017 and my accounts in March 2017. So I didn’t quite get a year.

Is it the Preferred Deposit? https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/ICCRateSheet.pdf

Says it requires $100k minimum, is that correct?

Yes that is the preferred deposit currently yielding .94% and yes I think it requires an initial 100K buy but after that according to my Merrill edge rep you can bring the balance below 100k and still buy and sell it without restriction.

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This document explains the relationship between Preferred Rewards and Banking Rewards for Wealth Management. I was not automatically converted to Banking Rewards for Wealth Management when my assets exceeded $250k, though I’ve heard reports of some people being auto-converted.

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Thanks for the information but it doesn’t seem worthwhile to hit that tier.

What? They take away your free trades if you are a wealth management tier? I’d be pissed as heck if they automatically converted me!

@russelljohnson, it is an attitude like that which will keep you poor.

I’ll be poor because I think their 250k+ tier benefits are crap?

That’s strange.

No, it was said tongue in cheek. If you don’t think it is worthwhile to hit the $250,000 mark then presumably you won’t hit the $250,000 mark. And you will stay poor. :slight_smile:

Or put the surplus in another account?

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