Bank of America said it is planning to set the minimum wage for all employees at $25 an hour by 2025, ABC News reports.
The increase in hourly pay puts the bank on course to surpass its big-bank peers in a time of worker shortages across the U.S.
It would be the highest minimum wage paid by a large bank and could pressure others to follow.
Wages have been increasing at big banks in recent years because of pressure from groups to address wealth inequality.
Bank of America raised its minimum wage to $15 an hour in 2017 and two years later it lifted that to $20.
The Charlotte, North Carolina-based bank has more than 210,000 employees.
Debates about the minimum wage were raised again during the COVID-19 pandemic and after U.S. President Joe Biden's inauguration.
"It costs us a few hundred million dollars a year...but it's an investment," the bank's chief executive officer Brian Moynihan told CNN's Poppy Harlow Tuesday. "It's about maintaining a great standard of living for our teammates," Moynihan said.
Bank of America will also require companies it does business with to pay their workers at least $15 an hour. It says 99% of its vendors are already complying, according to reports.
Biden supports increasing the federal minimum wage to $15 an hour from its current $7.25. Amazon, Walmart, McDonald's and Starbucks have said they will increase workers' hourly pay.
Average hourly earnings for private-sector workers increased by 21 cents to $30.17 last month, a Labor Department report showed.
The proposal to increase the minimum wage to $15 per hour didn't make it into the nearly $2 trillion stimulus aid bill that passed earlier this year but Democrats have vowed to push for a minimum wage rise later this year.
