If you are thinking about opening an online bank account, American Express personal savings could meet your needs. You’ll enjoy advantages such as high interest rates and no fees. Here’s a look at what Amex online savings has to offer.
American Express Personal Banking Features
Personal savings with Amex means you get the convenient features standard with online accounts. For example, FDIC insurance would cover your account up to $250,000, and you can set up recurring transfers and links with your other bank accounts.
Signing up for Amex’s high-yield savings is easy too; to start, you need basic contact information as well as the routing and account numbers of the external account that will fund your personal American Express customer account. (If you prefer, you do have the option to mail a check to fund the account.) You need to be at least 18 years old and meet U.S. citizenship or residency requirements. You also need to submit employment information to comply with regulations under the Bank Secrecy Act. Once you have an account, access is available seven days a week, 24 hours a day, and interest accrues right from the start.
Other than the basics, there are many advantages you get with American Express online savings that are difficult to find elsewhere. The annual percentage yield, or APY, is 0.9 percent, whereas the average from the top 50 American banks is a paltry 0.11 percent. This incredibly competitive 0.9 percent APY rate comes with no minimum balance requirements and no fees.
How Much Is American Express Saving You?
Having no fees associated with your Amex personal savings can lead to substantial accruals. For example, take the $5 monthly fee that Bank of America charges for its regular savings account. Right away, you save $60 a year with Amex from not having to pay that fee, and that is $60 more you have to invest.
Of course, it is worth mentioning in this American Express savings review that Bank of America and many other banks do give options that let you skip this type of fee. Often, these options amount to jumping through hoops. Bank of America mandates satisfying a minimum daily balance of $300, for instance, or meeting automatic transfer requirements, or linking certain Bank of America accounts together, or enrolling in a rewards program. Whew! That’s a lot to remember, and slipping up can be easy. With American Express online savings, you enjoy no stress and no hassle.
There are other fees that institutions such as Bank of America charge, too. If you make more than six transfers and withdrawals per statement cycle, you may incur a $10 fee. You should also expect fees when using non-Bank of America ATMs as well as overdraft fees ($35), returned item fees ($35) and overdraft protection fees ($12). There are assorted other fees too, and the bottom line is that you can keep a vigilant eye on your Bank of America account and still end up paying $35 if, say, someone deposits a birthday check later than you expected. Is the stress of possible fees worth it?
With American Express, suppose you try to make more than six withdrawals or transactions per statement cycle (federal regulations set the number at six). American Express can simply refuse the transaction, and you have the option of requesting a withdrawal via check if you need the money.
American Express CD Rates
If you want a CD account in addition to (or instead of) American Express personal savings, you can certainly do that. In fact, doing so may bring you a higher interest rate than the already high 0.9 percent. As of Nov. 30, 2016, a 24-month CD accrues 1 percent APY. For 18 months, the figure drops to 0.6 percent, so a savings account may make more sense in this case.
Looking longer term, a 60-month CD comes with a whopping 1.70 percent APY. If you deposit $1,000, you get $88 just from leaving that $1,000 alone. For 48 months, the APY is 1.45 percent, and it is 1.25 percent for 36 months.
In other words, you may prefer American Express CD rates to an American Express online savings account if you do not need access to your money for two years or more. Early withdrawal penalties may apply if you try to take out CD money before the account matures.
To enjoy the flexibility of Amex personal savings along with the higher rates of long-term CDs, American Express savings account reviews recommend doing both: Open a savings account along with a CD plan that meets your needs.
Why Choose American Express Personal Savings?
The top reason to choose American Express personal savings: It meets your needs and makes sense for your situation. Due to the no-minimum-balance requirement, it does not matter if you have only $100, $1,000 or $100,000 to deposit; Amex personal savings works for any of these situations. Nor do you need to worry about being unexpectedly hit with monthly fees if you fail to meet one or more criteria on a long list of requirements.
Online banking certainly is convenient, but if access to a physical location for everyday use is important, you may want to open an account at a bank or credit union close to you. This way, you have instant access to emergency funds if you need them, while your savings dollars grow even mightier in an online account. You do not get ATM cards, checks or debit cards with Amex savings; it truly is a savings account. Plus, if you decide to close your account, you can do so easily from your online dashboard. No complicated phone calls are necessary.
There is no doubt that an American Express personal savings account can be a valuable player in your overall savings portfolio. Perhaps you have (or want) CD accounts, local bank accounts, investment accounts and online savings accounts. Amex offers a relatively high APY for a savings account, and you need not worry about minimum balances and fees. You can also go with Amex for its high CD rates.