Looking for a place to earn some extra interest on your savings? You’ve probably heard of some of the banks that offer online savings accounts, but many people had no idea that American Express offers the exact same thing. You can earn a great interest rate while enjoying the same high level of customer service you have come to expect from a company like AMEX. Need more information on opening a business savings account, we can help you with that as well!
American Express Savings Account Features
American Express is one of the premiere credit card companies around. With the recent financial crisis some of the traditional credit card firms like AmEx and Discover got into the banking business in an attempt to steal market share.
American Express Bank, FSB offers two online account options: the online savings account and a certificate of deposit.
The Online Savings Account is similar to options from companies like Discover Bank, Ally Bank, and FNBO Direct. You get an online-only account that pays a very competitive interest rate compared to brick and mortar banks in your city, and is often among the highest in the nation.
However, as with many things in life, not all online accounts are made the same.
How Does AmEx Online Savings Account Compare?
Is the American Express Savings Account any better or worse than the competition? Here’s a deeper look.
FDIC Coverage. Above all other options — interest rates, fees, etc. — the need for Federal Deposit Insurance Corporation is an absolute necessary for any banking account you open whether online or brick-and-mortar. As you might expect, American Express’ savings accounts are covered by the normal FDIC coverage of $250,000 per account, giving you the security of knowing your funds are guaranteed up to that limit.
Interest Rates. When you look at the major players in the online savings account arena (big banks that you would feel comfortable with rather than random small institutions), American Express’ online savings account has one of the highest interest rates available. The current rate is comparable to or higher than other high-interest savings accounts such as Ally Bank, Capital One 360, CIT Bank, and EverBank. The difference in rates are mostly insignificant unless you are sticking thousands of dollars into the account, but nonetheless one of the highest rates is with American Express.
Interest rates for certificates of deposit (CDs) are also competitive, and vary based on the duration of the CD. American Express offers CDs ranging from 6 months to 60 months. Because the rates change frequently, we recommend visiting our rate table for current rates:
Fees. When it comes to fees, the American Express Savings Account makes it easy: there are none. There is no minimum balance requirement, not even to open the account. (You can get started with $1.) There are no fees for withdrawing your funds or closing your account.
The only time you would ever pay a fee would be if you had an overdraft on the account, or if you incur a prepayment penalty for withdrawing principal from a CD before its maturity date. Since this is a savings account and you handle your online transfers online the likelihood of that is incredibly low.
Opening an American Express Personal Savings Account. To open an account, you simply need to apply online, then verify the online accounts you wish to link to your new American Express account. American Express will verify your account by making two small test deposits into your account, then require you to verify the amounts deposited. Once you do that, your accounts are linked and you are in business. You can link up to three external accounts.
Deposits and Withdrawals. As with other online savings accounts, you handle your deposits through online transfers. That means you need to have an account elsewhere (usually a brick-and-mortar bank that offers you checking privileges and other necessary in-person perks), but the transfer process is simple and is handled via ACH transfers, which typically only take a day or two. You can also mail a check directly to American Express and they will deposit it into your account that way as well. (The check has to be from your own account, not from someone else.)
The only downside is some other banks offer electronic check deposit through scanning the check or taking a picture of it. American Express hasn’t rolled out that feature out yet.
Customer Service. Hopefully you won’t need to contact customer service with a problem, but if necessary they are reachable on the phone 24 hours per day, 7 days per week. This is common with online-only institutions that compete with American Express, but it is nice to know the same holds true. American Express’ customer service on the credit card side of things is exemplary, and you should expect the same on the banking side.
Opening an American Express Personal Savings Account
To open an account, you simply need to apply online, then verify the online accounts you wish to link to your new American Express account. American Express will verify your account by making two small test deposits into your account, then require you to verify the amounts deposited. Once you do that, your accounts are linked and you are in business. You can link up to three external accounts.
In order to open an American Express Personal Savings account you can either apply online or by phone. You will need to provide the following information for each account holder:
- Social Security number
- Email address
- Home address
- Phone number
- Date of birth
- Account and routing numbers for the outside bank account(s) you will link to your American Express Personal Savings account
You will complete an application, when you will choose the type of account that you want. This can be either a High Yield Savings account or a certificate of deposit. Once your application is approved, you’ll receive a confirmation, either online or by email. You will also receive an American Express Personal Savings Welcome Kit by mail.
Once your account has been approved, you can fund it. You can do this either by linking your current external bank account to the American Express account, and transferring the funds online, or by mailing a check. As soon as the money is received and credited to your account, you will begin receiving interest on your account.
The external linked bank account(s) must belong to you and have the same ownership as your American Express Personal Savings account. You can link as many as three of your current bank accounts to your American Express account.
Types of Accounts Available at American Express Online Savings
American Express Personal Savings accounts can only be used for personal, family or household purposes. They are not available for IRAs, trusts or business accounts. In lieu of trusts, they do offer Payable on Death (POD) accounts, in which the proceeds of the account automatically transfer to the named beneficiary on the account upon the death of the primary account owner.
In addition, you can’t link IRAs, trusts or business accounts to your American Express Personal Savings account. In fact, American Express warns that they may terminate or freeze your account if it is used for business or commercial purposes, or if it is linked either to a business account, or to an account that you do not own.
American Express Personal Savings Account Mobile App. The American Express Personal Savings account mobile app is available for Android smart phones or tablets, or iPhone or iPad devices.
American Express Personal Savings Account Security
As an online banking platform, American Express Personal Savings Account does everything possible to ensure the security of your account while you are transacting business online or on your mobile device.
Unauthorized transactions limit your liability to $50, as long as you notify the Bank within two business days after you learn of the loss or theft of your account access information or mobile device. A toll-free phone number is provided for this purpose.
Other security features provided by the Bank include:
- Constant monitoring of the activity in your account for potential fraud
- Multi-factor authentication, through use of one-time codes on non-recognized devices
- Blocking of unauthorized access through the use of numerous secure firewalls
- Use of Secure Socket Layer (SSL) encryption to create a secure connection with your browser
- You are automatically logged out of your account after 10 minutes of inactivity
- The Bank does not share your usernames and passwords with anyone
American Express Personal Savings High Yield Savings Account
This is a true high-yield savings account that provides high interest with limited access to your funds. There is no minimum deposit required to open your American Express Personal Savings account.
Under Federal Reserve Regulation D, this type of account allows a maximum of six withdrawals or debits per statement cycle. For this reason, the account does not come with an ATM card, debit card, or checks to facilitate frequent withdrawals.
On the funding side, you can make lump sum deposits, or set up recurring deposits, or a combination of both. Recurring deposits can be either monthly or weekly.
The current yield on the American Express Personal Savings High Yield Savings Account is 1.25% APY on all balances.
American Express Personal Savings Certificates of Deposit
American Express Personal Savings offers certificates of deposit with terms ranging from six months to 60 months.
CD interest rates: American Express Personal Savings CDs yields as of November 14, 2017, are as follows:
- 6 months – 0.40% APY
- 12 months – 0.55% APY
- 18 months – 0.60% APY
- 24 months – 1.00% APY
- 36 months – 1.25% APY
- 48 months – 1.70% APY
Interest is compounded daily, and is credited to your CD account on a monthly basis. You have four options as to exactly where the interest will go:
- It can remain in your CD account, where it will earn compound interest (this is the default setting)
- Transferred automatically into your High Yield Savings Account, on a monthly basis
- Transferred automatically into a linked bank account, on a monthly basis
- Mailed to you by check, on a monthly, quarterly or annual basis
Early withdrawals: You can withdraw interest earned at any time before the maturity date of the CD, though the bank advises this will reduce interest income earned. Principal withdrawn prior to the maturity date will be subject to an early withdrawal penalty.
Early withdrawal penalties are as follows:
- For a CD with a Term of 12 Months or Less: If you withdraw all of your principal balance, or if the account is closed for any other reason, the penalty is 90 days’ interest on the withdrawn amount applying the interest rate disclosed in your account-opening documents.
- For a CD with a Term of More than 12 Months: If you withdraw all of your principal balance, or if the account is closed for any other reason, the penalty is 180 days’ interest on the withdrawn amount applying the interest rate disclosed in your account-opening documents.
CD renewals: CDs will automatically be rolled over to a new CD of the same term. You will have 10 calendar days from the maturity date to cancel the rollover without penalty. Renewal will not take place if you have specified that you do not want automatic renewal, or if the Bank no longer offers a CD of the same term.
You can add funds to a CD after it matures, but within the 10 day grace period on the renewal.
Overall, the American Express Savings Account offers a great online savings account from a trusted name in the financial industry. If you are looking for best in class interest rates and a trusted bank, then check out American Express.
For more information, or to open an American Express Personal Savings Account online, visit, http://personalsavings.americanexpress.com/